COMMONS

Inquiry into supported housing funding reform launched

15 December 2016

The Work and Pensions Committee and the Communities and Local Government Committee launch a joint inquiry into the Government's funding reform for supported housing.

Scope of the inquiry

The inquiry examines the planned changes for 2019–20, when core rent and service charges for supported housing will be funded through Housing Benefit or Universal Credit up to the Local Housing Allowance (LHA) rate. For costs above this, funding will go to local authorities for disbursement locally.

The Committee considers whether the new system will ensure that the varied rate of the LHA cap will not adversely affect tenants and providers in low-value parts of the country. It examines how existing tenants will be protected following the switch and ask whether the changes should be piloted.

The inquiry also looks at the effect that uncertainty about the new model is having on the sector and explores whether separate funding models are needed for refuges and other short-term supported housing services, or sheltered housing services for the elderly, which would require a higher cap.

How the localised funding pots would work, including how the money will be ring-fenced and which factors should be used to determine an areas allocation, are also investigated by the Committees.

Written submissions

The Committees invite written submissions on the following areas via the inquiry webpage:

  • Whether separate funding models are needed for:
    • refuges and other short-term supported housing services
    • sheltered housing services for the elderly (these services would require a higher cap)
  • How the localised funding pot for supported housing would work, including:
    • how it will be ring-fenced
    • which factors should be used to determine local allocations
  • How existing supported and sheltered housing tenants will be protected following their transfer in April 2019.
  • The effects of uncertainty about the new funding model on tenants and development in the supported housing sector.
  • Whether the new system should be piloted before its full implementation.
  • Whether the new system will resolve the shortfall in supported housing placements over the long term.
  • Whether the new system will ensure that the varied rate of the LHA cap will not adversely affect tenants and providers in low-value parts of the country.
  • What alternatives there are to the LHA cap, such as a supported housing cap and a sheltered housing cap.
  • The relative effects of different funding model options on tenants.
  • What steps should be taken to mitigate the effects of the 1% rent cut.
  • How the LHA cap will affect pensioners.
  • Whether housing benefit acts as a disincentive to work.

The deadline for written submissions is Friday 3 February 2017.

Chairs' comments

Richard Graham MP, Work and Pensions Committee co-Chair of the inquiry, said:

"Supported housing is more expensive for housing providers as residents often need personal care, support or supervision. However, as we have seen in our inquiry into support for ex-offenders, it can also be a crucial step in a person’s transition into employment and in preventing re-offending, with all the human and economic benefits that can bring.

From 2019/2020, local authorities will be given funding to 'top up' payments to housing providers, to meet this higher cost of supported housing. We will explore options for the top up fund in order to reduce uncertainty and support more development in the sector."

Helen Hayes MP, Communities and Local Government Committee co-Chair of the inquiry, said:

"Supported and sheltered housing provide vital accommodation for some of the most vulnerable groups in society, but there are concerns that these changes could exacerbate the shortfall in placements, with providers having to abandon plans for new developments or scale back and even close existing schemes.

Our inquiry will consider the potential impact on the sector and explore how the changes will work in practice, which will include looking at how local funding allocations will be determined. We are also keen to find out how existing tenants will be protected following the switch."

Further information

Image: iStockphoto

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