Is supported housing at risk?

Matthew Eddisford reports on looming threats to the future of supported housing.

Late last year the Government launched its consultation on the future funding of supported housing. Prior to the launch, housing associations were crying out for clarity on these funding arrangements to enable them to plan for the future with some certainty and address unmet demand for supported housing. Has the consultation provided this clarity? Unfortunately, no.

So what are the issues housing associations who wish to provide supported housing now face?

Uncertainty over future rent levels

The Government have confirmed that an ‘LHA + top up’ rate will be applied to all supported housing rents from April 2019. However, there is no indication as to what level of ‘top-up’ will be allowed. We understand that the initial fund will be at a level comparable to current costs – but how this will be applied is unclear. It also fails to take account of the current unmet demand and could turn into a post code lottery, with local authorities who have done little in the preceding years set to lose out further. Without any confidence over the sustainability of rents housing associations are limiting, or even abandoning altogether, future development plans.

Will a ring-fence protect funding?

The Government have assured us that a ring-fence will be in place to protect this pot of money. However, history tells us this will not offer the necessary protection to funding in the long-term – remember Supporting People?  Without a ring fence in place there is a genuine fear that the supported housing top-up ‘pot’ will be swallowed up by local social care priorities. What housing associations would perhaps rather see is the introduction of statutory duties around housing, to strengthen the grip on this housing funding, but it is unclear if this has been considered.

Addressing long term need

Property costs money. Adapted and specialist property costs a bit (or in some cases a lot) more money, and so for housing associations property is an investment paid for over the long term. With no guarantee as to the longevity of income, housing associations are again in a Catch 22 – halt development and fail to meet the very objectives of our being, or carry on regardless and jeopardise the business? Housing associations have to consider the risk if the schemes are to fail, ie. the exit strategy. This strategy is not necessarily quite so clear when considering highly bespoke housing.  Will this result in the housing needs of the most vulnerable not being met?

Protection of existing tenants

The Government has confirmed that the arrangements will be applied to ALL tenants from April 2019, and so existing tenants will not be protected. Existing tenants could see their entitlements slashed significantly which could see them fail to meet their rental commitments or, in some circumstances, face the prospect of eviction.  Housing associations may have some very difficult decisions to make around the ongoing viability of schemes and providing vulnerable individuals with a home. It is not inconceivable that we could see swathes of supported accommodation becoming untenable for associations and/or tenants.

A ‘standard’ model of housing with little regard for the individual

As local authorities will have a finite pot of money to work with (and an uncertain ring fence), the danger is that it will be a race to the bottom in terms of rent levels which inevitably leads to compromises on quality.  Are we likely to see the widespread introduction of large scale blocks of self-contained units which provide efficiencies on both the housing and support costs? With cost, and not necessarily outcomes, being the key driver, this is a distinct possibility. A mixed portfolio of housing is crucial to ensure the broad spectrum of choice is being offered.

Where will the capital come from for much needed supported accommodation?

Under the current framework, supported housing is viewed as a sound long term investment. We have seen the market flooded with interest from institutional investors and corporate lenders. However, with uncertainty over long term income from new schemes and the strength of housing providers to meet their debt commitments, capital may be withdrawn.

Where does this leave us?       There are more questions than answers to all of these problems as things stand. However, in my optimism I am hoping that the Government will realise that putting existing tenants at risk and causing the abandonment of new supported housing is in absolutely nobody’s best interests, ethically or financially. I also believe that fundamental changes like this will result in innovation and a desire from housing associations to ensure things ‘keep moving’. Demand for housing has arguably never been greater and housing associations need to continue to step up to the mark and provide innovative solutions in the face of these challenges.

Matthew Eddisford is Chief Executive of Care Housing Association