So far in our series of blogs on the future of funding for supported housing, we have considered what we mean by the term supported housing and how much it costs to keep this valuable service available to meet the needs of vulnerable adults in society today. We have also looked at why the Government want to consider changing the way in which supported housing is funded and what their key objectives are in so doing.

The purpose of this article is to examine exactly what funding changes the Government has in mind as they endeavour to reach their long term goal of reducing the amount of money they must commit to this type of housing.

The new funding models

No two people with support needs are exactly the same and it follows that in meeting the diverse needs within the supported housing sector, there will inevitably be different types of housing required. Some vulnerable adults will require a short term boost of support to get them back on their feet and living a full and independent life, whereas others, with life impeding significant support needs, will require assistance throughout their lives with little or no hope of ever living independently. Having considered the needs of this sector therefore, the Government has concluded that there are three broad groups of service users within supported housing:

  1. Sheltered housing and extra care supported housing.

  2. Short-term and transitional support.

  3. Long-term support.

Sheltered Housing and Extra Care Housing

This type of housing is usually designated for older people with support needs with the aim of helping them to stay independent for as long as possible. It can however include working-age tenants. For this type of housing, the Government is proposing to introduce a ‘Sheltered Rent’ which will be a type of social rent which keeps funding for this housing type in the welfare system. An overall cap will be set on the amount providers can charge in gross eligible rent with this model being determined using the following formula:

Sheltered Rent = ((Formula rent +/- 10% flexibility for supported housing) + (£X for eligible service charge) up to a level of £Y).

Short-term and transitional support

This type of housing is for those who will not necessarily require support for a long period of time and for whom short term assistance is the most effective. It commonly includes those who are homeless with support needs, those fleeing domestic abuse, vulnerable young people, offenders and those with drug and alcohol misuse problems. As a result of the short term nature of this type of housing, there are high expectations that the tenants will move on into unsupported accommodation but this needs to be judged alongside the reality that this type of housing also attracts high housing costs but lower projected demand for increased provision.

The future funding for this type of housing will come from a local ring-fenced grant fund which will be commissioned at a local level. What this means is that all the funding for housing costs (including rent and eligible service charges) that were previously met from Housing Benefit, will be allocated to local authorities who will be tasked with funding the services in their local area from this grant rather than through the welfare system. Non- statutory guidance will be issued setting out the Government’s key requirements for the delivery of this type of housing which will also explain the detailed grant conditions and what local authorities will be required to consider in the allocation of the short-term housing grant.

The intention is that this new model will be people-focused with local authorities being required to produce Supported Housing Strategic Plans to help to keep the focus on where there is most need. Funding for bed spaces (rather than directly to/for the individual) will also help people to move in to work and become independent without fear over how to pay high rents from a low income.

Funding certainty

One of the key concerns within this sector of the supported housing provision is how providers can be certain of funding to enable future provision and growth to continue. Local authorities will be required to report on their spending of the grant twice a year and provide a breakdown of how much is spent for different client groups to help to ensure equal distribution. It is intended that the funding will fund the provision, rather than the individual as is currently the case. This will mean that tenants in short-term accommodation will no longer pay rent but they will be funded by local authorities through the grant with the intention that this will provide more certainty to providers in the short and long-term. In their Policy Statement, the Government stated that:

We will work with local government and the welfare system to ensure that grant allocations for short-term supported accommodation in 2020-21 match the sums that would otherwise have been paid out in each local area to pay for housing costs through the welfare system. The amount of short-term supportedhousing grant funding will be set on the basis of current projections of future need.

It is also intended that this new model will give local authorities an enhanced role in planning, commissioning and delivering supported housing to meet local needs whilst maintaining value for money.

Overall, the Government has been at pains to stress that it is not their intention, in establishing this new funding model, to short-change those who most need this type of supported housing. Their Policy Statement seeks to make this very clear:

We are also very clear that every vulnerable individual needing to stay in short-term supported accommodation who would be eligible to have their housing costs supported through the welfare system will continue to have their housing costs met through our funding model for short-term accommodation.

It is hoped that this will provide some assurance to both current and future providers of this type of housing and that this new approach will help to cultivate better working relationships between providers and local authorities.

Long-term support

This housing is intended for those with learning or physical disabilities or mental ill health as well as those with highly specialised support needs. There is little expectation among these tenants that any will be able to move on and so there is a low turnover of tenants. For this type of housing, the Government has decided that 100% of the housing costs (rent inclusive of eligible service charges) will continue to be funded as at present through the welfare system.

How does the Government plan to implement these changes?

Alongside the new funding models, local authorities will be required to produce a local plan which sets out how funding will be used to meet identified local needs. Local authorities will also be expected to be able to justify their approach by carrying out full needs assessments within their local area to identify current provision and future need for all supported housing groups.

A National Statement of Expectation

At this stage of the implementation process, there are far more questions then answers. Many providers are concerned to know how they will fare under the new funding regime. Being aware of this, the Government intend to provide a National Statement of Expectations which will set out general expectations for the supported housing sector and explain how they intendfor the funding distribution to be maintained fairly with a balanced approach to individual outcomes, value for money and quality housing.

Providers in Scotland

At this stage, although the three types of supported housing identified by the Government together with many of the key changes will also apply to providers in Scotland, we anticipate that it is likely that there will be some differences. The main difference will relate to how the funding for supported housing is allocated as this will be devolved to Scotland from April 2020. The following website may be of assistance to those providers based in Scotland:

Next steps

In our next and final blog in this series on the future funding of supported housing, we will be looking at the Government’s proposed timetable for the above changes and answering some of the commonly asked questions that many providers have been asking in advance of the implementation of the changes.

MR Associates

July 2018