Peter Aldous welcomes proposals for a long-term funding framework for supported housing as a step in the right direction but calls for remaining concerns to be addressed

18th January 2018

Peter Aldous welcomes Government proposals for a long-term funding framework for supported housing as a step in the right direction, but calls for further work to address the proposals for funding short-term accommodation, to properly synchronise supported housing processes with those of universal credit, and to provide a seamless journey for a person moving between different funding models.

It is a pleasure to serve under your chairmanship, Mr Sharma. The right hon. Member for Birkenhead (Frank Field) is no longer in his place, but I congratulate him and the hon. Member for Sheffield South East (Mr Betts) on securing this debate through their efforts, and those of their Committee members, to produce their groundbreaking and constructive report of 1 May 2017.

I welcome the new Minister, and pay tribute to her predecessor, my hon. Friend the Member for Nuneaton (Mr Jones), for his work over the past 18 months in helping us to move towards the goal that we are all striving for: that of putting the future funding of supported housing on a secure, sustainable and long-term footing. It is vital to do that if we are not to let down vulnerable groups, whether they are elderly, young, have physical disabilities, are fleeing domestic violence, or face mental health challenges and anguish. The demand for such care and support is rising, because we have an ageing population, and increasing levels of mental ill health and learning disabilities.

This is a difficult task, as the sector is made up of many sub-groups with different challenges and needs. It is necessary to do a lot of background work, to listen to the views of all interested parties, and to make proposals that will stand the test of time and help to secure much-needed investment in the sector.

It is important to recognise the good work that many people and organisations have done over the past 18 months. Providers, charities and their representatives have participated in consultations and have provided the Government, MPs, and peers with well-reasoned proposals. Credit is due to the Government for carrying out the first evidence-based review for 20 years, and for conducting two consultations in which they fully engaged with the sector. They listened to their concerns and have set up task and finish groups.

The Government have also provided a significant amount of money for supported housing schemes, such as the shared ownership and affordable homes programme, the care and support specialised housing fund, and funding for women and girls fleeing domestic violence. It is also important to recognise the very influential joint report of the Select Committees. They did a great deal of listening and thinking, and they have come up with constructive proposals that significantly move forward the complicated process of finding the right solutions.

It is appropriate to highlight the work that Lord Best, Housing and Care 21, Riverside, the Home Group and Hanover Housing Association did to analyse data from approximately 43,000 supported housing and older people’s tenancies across the United Kingdom, to demonstrate that the Select Committees’ supported housing allowance proposal represented a viable and workable approach.

My hon. Friend has been doing a great job on this subject for a long time, as other Members have said. When Lord Best and the five supported housing providers, including Riverside, analysed some of that data, they were very supportive of the Government’s principle that there should be some control of costs in the sector, and of having diversity in approaches, recognising that costs vary substantially across the country. We hope that that will be reflected in the Government’s eventual position. Does my hon. Friend agree?

I do. That illustrates the point that the big challenge is in how to respond to local needs but not, as the hon. Member for Dulwich and West Norwood (Helen Hayes) said, create a postcode lottery effect.

The Government’s revised proposals, which they announced at the end of October, were generally a step in the right direction. I hope that through the consultation that closes next week, it will be possible to address the outstanding concerns, so that the Government can arrive at a funding scheme that we can all support.

Like colleagues, I received many briefings before the debate, and I will highlight some of the feedback. The Home Group, which is active in the north-east, Cornwall and East Anglia, including Lowestoft in my constituency, advised me that the Government’s October announcements gave it the increased confidence that it needed to get on with building supported housing services. It announced a £50 million investment package, which will commence in March, for three new supported housing schemes in Havant, Calderdale and Scarborough. It advised that the removal of the local housing allowance cap enabled it to commit to those developments, but it emphasised that it is vital that the detail of the new supported and sheltered housing funding proposals—such as the service charge cap—does not undermine the development of additional capacity, which we desperately need.

The Home Group believes that the overarching policy direction in this consultation is the right one; there is differentiation between short-term, sheltered and extra care, and long-term supported housing, which enables providers like it to design different funding mechanisms that cover legitimate costs. It recognises the diverse nature of its client groups in the sector. It stresses that it is essential that the three models work coherently alongside one another, as a pathway. As one of the UK’s largest providers, it works nationally with customer groups that fall into each of the three funding models. A customer may come to a service due to crisis, and thus will be eligible for short-term funding; however, they may depend on long-term support. It is therefore essential that a customer can move seamlessly through the pathway, and that a single scheme can efficiently incorporate two or more of the funding models.

We have heard that providers’ main concern with the proposals is about short-term housing. Those who have raised worries include the National Housing Federation, Anchor, Hanover Housing, Housing and Care 21, Riverside, YMCA, St Mungo’s, the Salvation Army, the Supported Housing Alliance, Rethink Mental Illness, and Emmaus, which has a community in Norfolk, near Bungay, which serves my constituency. The long list tells a story.

Riverside, St Mungo’s, YMCA and the Salvation Army have highlighted three concerns. First, the ring-fenced local authority block grants do not provide the same protections and rights for those living in short-term supported housing as for those living in long-term supported housing. They regard that as a backward step and a return to an institutional model. Secondly, they highlight that the proposed policy is moving in the opposite direction from universal credit, which seeks to encourage independence, with claimants managing their own housing costs. Thirdly, they point out that a discretionary local funding system would not provide the assurance required by providers seeking either to develop much-needed new schemes or to invest in the necessary upgrading and repairing of facilities.

Generally, funders lend on a 30-year basis, and the current model of benefit-backed rental income has enabled the sector to borrow significant sums at highly competitive rates. In contrast, local authority contracts normally last between three and five years only; that will not provide the necessary security of revenue to obtain private finance. There is no guarantee that ring fences will remain in place; indeed, recent history suggests that they are dismantled pretty quickly.

Fourthly, although authorities already commission services that reflect local needs, the proposals will extend this commissioning approach to housing costs, including rent and service charges. That will make providers completely reliant on local authorities for all funding. There is a worry that housing providers’ loss of independence will undermine sector viability and stifle innovation. Already, an example has been brought to my attention of a local authority specifically requesting, in tenders, that housing costs be reduced.

Finally, the organisations point out that establishing a new funding system for short-term supported housing requires complex arrangements that impose expensive administrative burdens and bureaucracy on local authorities. Their alternative proposal, to which I urge the Government to give serious consideration, is threefold. First, they propose that housing costs remain in the welfare system. Secondly, instead of devising a complicated new funding system, the Government should review the administration of universal credit, and in particular the speed with which claims are administered, so that it can work better for cases of short stays. Thirdly, in services where the typical length of stay is such that universal credit cannot cover housing costs—for example, where the stay is a matter of days or weeks as opposed to months—localised funding should be an option. This localised funding model could help with the wait for housing costs to be met during the initial assessment period.

There has already been mention in the debate of the need, highlighted by the National Housing Federation, to tighten the definition of short-term services in the consultation paper. It is very wide and should be tightened, so that it is clear that the local system covers short-term emergency accommodation, where people stay for a period of weeks, rather than months. That would be in line with the recommendation in the joint report, and it would make the system fit better with universal credit.

Does the hon. Gentleman share my concern that if we look too much at how to get a saving out of the service, and look at other local authorities, we miss the fact that services for short-term supported housing are extremely good value for money, because they are preventive and they help people to find help before their issues worsen?

The hon. Lady is right. It has been said before that if we get the supported housing right, we save the national health service money. As ever—we are always making this plea—the Government need to break out of departmental silos and think holistically. I am sure that the Minister, in her new position, will take a sledgehammer to those silos.

I would like to highlight feedback I received from the Professional Deputy Service, which is based in Suffolk and supports individuals who lack the capacity to manage their property and personal affairs. In its response to the consultation, it emphasised the importance of the most severely disabled people with housing needs being brought into a local strategic planning and provision process. I will look to facilitate that in the coming months by working with the Professional Deputy Service, local councils and housing associations.

The partnership between the supported housing sector, Parliament and the Government is moving in the right direction in putting in place a long-term funding framework for supported housing, but there is clearly still work to do to address the significant drawbacks of the proposals for short-term accommodation, to properly synchronise supported housing processes with those of universal credit, and to provide the seamless journey articulated by the Home Group. We need to complete that task, which is so important to the dignity and wellbeing of a diverse, often vulnerable but very important group of people.

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