Government proposal for future funding of Supported Housing – our Chief Executive’s response

In November 2015, the Government announced its intention to cap social rents to Local Housing Allowance (LHA) rates for new lettings by housing associations from 1st April 2018. LHA is typically based on the cheapest 30% of private rents in an area.

Analysis indicated that this would affect 32% of our properties and create significant financial viability issues. As a result, Southdown has been actively involved in national and local campaigns to lobby Government and respond to consultations to highlight the devastating impact their proposals would have on the supported housing sector.

These activities have been successful and, in 2016, the Government agreed to rethink their proposals. In November 2017, the Government announced a revised proposal to come into effect from 2020.

The proposal suggests a new system for payment of rents in Supported Housing is split into three categories:

  1.  ‘Sheltered Rent’ for those in sheltered and extra care housing - paid for through welfare system (Universal Credit/Housing Benefit)
  2.  ‘Short-term and transitional supported housing Local Grant Fund’ - for schemes where residents stay for up to two years, commissioned, assessed and paid at local level outside the welfare system, and
  3.  ‘Long-term Supported Housing’ - including learning disabilities, mental health and physical disabilities paid through the welfare system (Universal Credit/Housing Benefit) but with no cap at LHA levels.

We welcome the Government’s recognition of the complexity and specific issues facing the supported housing sector. And, we are optimistic that future certainty of rent levels will enable us to bring forward development plans and increase the supply of Supported Housing in Sussex.

We are currently working with our local authority colleagues and the National Housing Federation to consider the proposals and formulate responses to the consultation.

Key issues we have identified include:

  • The types of accommodation that would be classified as ‘short-term’ and the implications for tenants and landlords in not having rents paid through housing benefit
  • Implications as a social landlord in loss of autonomy with control over short-term rents moving to local authorities, and how this sits with rent setting standards set by our regulator, the Homes and Communities Agency
  • How Universal Credit processing of long-term supported housing rents will work, especially how the system will assess appropriateness of level of costs and eligibility of service charges
  • The implications on local authorities, particularly the loss of specialist knowledge and relationships with the disbanding of Housing Benefit teams following the full roll out of Universal Credit.

Full details of the proposal is available to read on the Government’s website. Consultation on the proposal will run until 23 January 2018.