12 July 2016

Peter Aldous leads a Parliamentary debate outlining the concerns in the supported housing sector and the importance of putting the funding of supported housing on a sustainable long-term footing.

I am pleased to have secured this debate in the week before the start of the summer recess. While the Government are carrying out a review of supported housing, it is important both to obtain a progress report from the Minister as to how it is going and to re-emphasise the vital importance of putting the funding of supported housing on a sustainable long-term footing. It is absolutely essential that we do this, so as not to let down a very vulnerable group of people, whether they are elderly, young, have a physical disability, have suffered domestic violence or face mental health challenges. I seek to be helpful and not hostile, but those involved in the sector are very worried about the future, and it is vital that the Government know their concerns and take them fully into account in producing their proposals, which I hope will be available shortly.

The one-year exemption for supported housing from the 1% rent reduction for social housing landlords and the one-year delay in applying local housing allowance caps to residents in supported housing provide some breathing space, but the clock is ticking down to 2017, when this one-year grace period expires. It is important to have new policies in place well before then, so as not only to remove worries about the viability of existing schemes but to act as a catalyst for attracting much needed new investment in the sector.

I congratulate my hon. Friend on securing this debate and raising important issues about the barriers to good care that a lack of the right supported housing can lead to for people with learning disabilities and mental illness. Does he agree that on a daily basis many mental health wards struggle to find suitable step-down and community housing for patients who badly need it because, as he is outlining, this issue has not been properly gripped?

I thank my hon. Friend and Suffolk neighbour for his intervention. Yes, I agree that we need to tackle this issue very quickly.

This week, I joined the National Housing Federation’s Starts at Home campaign, which aims to highlight the unique benefits of supported housing and to show why it is so important to individuals and society. It seeks to secure a commitment from the Government to ensure that everyone can have a home that meets their unique needs. Over the past three months, I have received representations from, had meetings with and visited a wide variety of organisations, national and local, all concerned about the sector’s future. As well as the National Housing Federation, these include the Home Group, Homeless Link, the Local Government Association, Suffolk County Council, the Salvation Army, Papworth Trust and Give us a Chance, which, as well as providing accommodation, helps young people into work and sustainable employment.

Is the hon. Gentleman also aware of the Cambridge housing group providing sheltered housing in my constituency? It warns ​that the changes to the housing cap could cost it up to £500,000 a year and plunge four of its key schemes in the city into financial chaos.

I am grateful to the hon. Gentleman for raising that issue. I come across many such cases, and I shall produce some statistics to confirm it. It is very important to have specific case studies on the ground that emphasise the serious nature of the problem we face.

There are also local providers in Suffolk and in my own constituency, such as Access Community Trust, Stonham, Orwell housing association and the Professional Deputy Service, that provide advice and support to vulnerable dependent people. There are charities and social investors either already active in the sector or wanting to get involved, such as Emmaus, Cheyne’s Social Property Impact Fund and HB Villages. The depth and breadth of interest and concern emphasise the importance of putting in place a sustainable framework for the future funding of supported housing and the need to do so quickly.

I echo the welcome of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter) for this debate. Is not “alacrity” the key word, in that 9,270 units—80% of all pipeline development in specialist housing—are under threat? Welcome though the review is, what we need is a quick decision from the Government to put on a firmer footing the long-term sustainable funding of specialist housing.

I thank my hon. Friend that intervention. He is right that we are getting to a stage when speed is very much of the essence.

The case for supported housing is compelling. There is a rising demand for care and support owing to an ageing population and increased levels of mental health and learning disabilities. As the National Housing Federation has pointed out, supported housing enables older people to retain their independence, and young people to live securely and in some cases to get their lives back on track; it ensures that victims of domestic violence are able to find emergency refuge and to stabilise their lives; it helps homeless people with complex and multiple needs to make the transition from living on the street to a settled home with education, training or employment; and it ensures that people with mental health needs can stabilise their lives and live more independently.

I want to say to the Minister that my hon. Friend has hit the nub of the problem. Such housing units have all these additional costs, which raises the issue of whether introducing this cap is at all appropriate for supported housing. Perhaps the Government should take stock and think again about what exactly is done in this sector.

I thank my hon. Friend for that intervention, and I shall come on to make that very point.​

The National Housing Federation has also pointed out that ex-servicemen and women are able to find a stable home, and this includes those with mental health and physical disability needs; and that people with learning disabilities are able to maximise their independence and to exercise choice and control over their lives. It should also be pointed out that investment in supported housing can provide an alternative to more expensive residential care settings.

I congratulate the hon. Gentleman on securing this debate on a very important subject. Does he acknowledge that the Homes and Communities Agency has identified savings to the taxpayer of £640 million through investment in supported housing?

Order. I did not interrupt while the hon. Gentleman was in full flow, but I must point out that by very long-standing convention, we cannot have interventions from Opposition Front-Bench Members in Adjournment debates. It looks as though the hon. Gentleman was not aware of that convention, but he is now.

Thank you, Mr Speaker. I, too, am now aware of that convention, although the hon. Gentleman’s point was a good one.

The development of new supported housing schemes using innovative models is of vital strategic importance to councils providing adult social care services. It will help them meet the care and support needs of an ageing population, making the best use of limited budgets. Such models provide people with greater independence, meet the support needs of individuals and are more cost-effective than residential provision.

I apologise for missing the first few words of my hon. Friend’s speech. He is making a strong case.

Worcestershire County Council, which has contacted me, fears that some of the schemes on which it is working with Fortis Living and the Rooftop Housing Group may be under threat as a result of this application of the cap. The council wanted me to ensure that my hon. Friend expressed those concerns this evening.

The position in Suffolk is the same as the position in Worcestershire.

The hon. Gentleman has been very generous in giving way, and he is making a powerful speech. Insecurity about funding, and the funding model, makes it difficult for a number of housing associations, including Stonham, to develop new products and secure the investment that they need in order to help people to maintain their independence in supported housing in a cost-effective way. Is that not the nub of the problem?

The hon. Lady is right. We are experiencing a period of limbo and uncertainty in which nothing is happening, and schemes that are desperately needed are not being developed.

Research shows that when a person with learning disabilities moves from residential care to supported living, about £185 per week can be saved. If that is ​extrapolated nationally, it means a saving of at least £72 million per annum for social care commissioning budgets. However, specialised supported housing has other advantages in comparison with residential care. In a care home, the minimum standard for an individual room is 12 square metres, whereas in an apartment in specialised supported housing it is about 50 square metres. In a care home, support is organised to meet the demands of group living, whereas in specialised supported housing it is tailored to meet the needs of the individual.

The Homes and Communities Agency has found that supported housing provision has a net positive benefit of £640 million for UK taxpayers. At present there is a shortage of 15,640 places, or 14% of supply, and if the current trends continue, the shortfall will double by 2019-20. Furthermore, there are 30,000 people in the UK with learning difficulties who are over 70 and still living with their parents. According to research conducted by Papworth Trust, 1.8 million people require some form of accessible housing, and the number is growing year on year. When disabled people are living in accessible homes that meet their needs, their quality of life is dramatically enhanced, and their job prospects also benefit.

The message is clear: there is a compelling case for supported housing, demand for which is increasing year by year. If we do not put its funding on a secure, sustainable long-term footing, a significant proportion of existing supported housing schemes will be forced to close, which will leave many vulnerable and disadvantaged people with nowhere to live. Moreover, the much needed new accommodation will not be built.

If we are to find a sustainable long-term solution to the problem of funding for supported housing, it is necessary to think outside the narrow departmental confines of the Department for Communities and Local Government and the Department for Work and Pensions. It is necessary to break out of the silos, and to think holistically. Supported housing is not just a matter for the DCLG and the DWP, because it is not just about housing and benefits. It is a case for the Department of Health, as it concerns physical and mental healthcare. It is a job for the Department for Business, Innovation and Skills, as it concerns the preparation of vulnerable people for the workplace. It is a case for councils, whether it involves housing authorities or social care providers. It is of interest to housing associations, charities and social investors who are keen to pursue innovative projects that would change people’s lives. Achieving good supported housing requires a focused partnership between housing authorities, housing associations, care and support providers, and councils delivering social care.

What all that means is that supported housing is not just about housing. Because it delivers benefits far beyond the walls of the DWP and the DCLG, it is appropriate to consider securing funding from a wide range of potential sources, including other Departments. In the fullness of time, devolved government may also have a role to play.

My hon. Friend is making a typically powerful speech. Does he agree that each year we have delayed discharge crises across acute hospital trusts in England, and were we to think long term about how we ​fund supported housing, it could pay for itself in terms of a reduction in the cost to the taxpayer of these crises, which happen every winter?

My hon. Friend makes a good point. If we raise our eyes and think long term, instead of just short term, savings will be produced that can deliver the far better, high-quality supported housing we need.

Does my hon. Friend agree that the reality on the ground is that the lack of suitable supported housing is leading to hospitals and mental health wards having to discharge people either on to the streets in some cases, which is most undesirable as they will include some very vulnerable people, or into other very unsuitable housing situations? This issue needs to be addressed, and conversations need to be had with the Department of Health to make that happen.

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.

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.

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 plate and carry out projects. In doing so, they will bring significant benefits to the lives of many.

Is the hon. Gentleman aware that women’s refuge accommodation in Scotland is often owned by local authorities or housing associations? Scottish Women’s Aid estimates that a one-bedroom flat in a city such as Glasgow would incur a £7,100 a year loss. Does he agree that if the policy on the cap is not changed, those services will become unsustainable?

I thank the hon. Lady for that intervention. This evening’s interventions started off with an East Anglian flavour, but they have now widened to cover the whole country. This is very much a national crisis. Going back to East Anglia, however, a housing association active in Suffolk has emphasised to me the importance of a long-term plan. It says that it cannot run a business with a 10-year outlook on the back of local authority annual discretionary housing payments.​

An organisation I would like briefly to mention is Emmaus. It was set up in the UK 25 years ago just outside Cambridge by Selwyn Image. It now has 28 communities across the UK supporting more than 700 vulnerable people, with the objective of increasing that figure to 1,000 by 2020. It needs the seedcorn of a stable funding regime in order to set up new communities such as All Hallows at Ditchingham, which is near Bungay in the constituency of my hon. Friend the Member for South Norfolk (Mr Bacon) but which also serves my constituency and several others in the surrounding area. Ultimately, with the right initial support, Emmaus communities are self-funding. Research shows that the social return on investment in its communities, using the Treasury’s recommended discount rate of 3.5%, is £11 for every £1 invested. In addition, the present value of savings to the state is nearly £6 million per annum for a contribution of just over £2.7 million in housing benefit.

Providing the right long-term investment framework will also encourage the provision in new developments of adaptive technologies, which not only enhance residents’ lives but can also produce significant cost savings for local commissioning councils, releasing funds for investment elsewhere. Research by HB Villages shows that the introduction of adaptive technologies can produce savings of between £3 million and £7.8 million—7% to 20% of budget—in a typical council.

In conclusion, I look forward to hearing the Minister’s response and hope that he will answer the following questions. How is the evidence review going? When will the results be available? Are the wide range of interested parties in the sector being consulted? What is the impact of the roll out of universal credit? Will he give early confirmation tonight that the threat of the crude local housing allowance cap will be removed after next April? In putting in place the new framework for the future funding of supported housing I urge the Government to be sympathetic and visionary and to think strategically. It is important for the futures of so many vulnerable people that the Government pursue such a course.

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