Concern over funding of supported housing halts the building of homes for the vulnerable

Housing associations deliver approximately one third of England’s supported and sheltered homes, which provide accommodation for vulnerable people, including the elderly and those with long-term disabilities.

A survey of 69 housing associations, carried out in May 2017 by the National Housing Federation (NHF), confirmed that plans to build new ‘supported, sheltered and extra care’ homes have been reduced from 8,800 to just 1,350 units. The reductions follow government plans to review or withdraw the funding model of the schemes, and the Green Paper that was expected before the summer has now been postponed until the end of autumn.

The NHF said the uncertainty had led to the postponement of 71 new schemes (representing 2,185 homes), the cancellation of 19 developments (803 homes), and the possible closure of a further 22 existing supported schemes and three sheltered schemes (132 homes).

Just 24% of schemes have continuing as planned, where it has been estimated that the local funding cap on housing benefits would be sufficient to cover costs, and 18% where any shortfall would be offset by government funding.

The NHF is critical of the failure, saying that supported housing plays an essential part in relieving pressure on the NHS, saving the taxpayer an estimated £3.5 billion annually in NHS costs. David Orr, Chief Executive of the NHF, described this as the ‘real cost of providing this type of housing’. He said: “It is time government put supported housing on a secure and sustainable footing.”

The Local Government Committee has said the government should scrap its plans, recognising that the new system did not provide a ‘competent starting point’, given that it was based on the private rented market. The NHF says the government has failed to heed warnings and housing associations have put forward an alternative model to address how money is allocated and how long it is available.

One of the social housing providers with developments put on hold is Riverside, which has suspended a scheme of 50 supported housing units for homeless veterans in Colchester, Essex. It is estimated that the financial shortfall would be approximately £116 per week for people living at Riverside’s development at Middleton, Rochdale in a one bedroom flat and requiring high levels of support. The proposed target rent and service charge would be over 50% higher than the LHA weekly cap and the local council is unable to commit to the gap in funding.

The Local Housing Allowance (LHA) rate will vary, potentially leaving deprived areas with LHA rates significantly out of kilter with rents. One example was explained by Mike Owen of Merthyr Valleys Homes, who said: “Perhaps as few as four private rented properties of very poor quality are setting the LHA threshold for more than 500 one-bed properties that we own.”