Supported housing funds to move to councils

The government will transfer money to councils to top up the cost of supported housing, as part of its plan to cap housing benefit at Local Housing Allowance (LHA) rates.

In a written statement, Work and Pensions Secretary Damian Green revealed that supported housing would be included in the government’s cap on housing benefit and Universal Credit in social housing to LHA (private sector) rates from 2019/20.

Aiming to provide local authorities with ‘an enhanced role in commissioning supported housing’, Green announced that the fund to be transferred to councils would be ring-fenced, although for how long remains unclear.

He said: “In England, we will devolve funding to local authorities to provide additional ‘top up’ funding to providers where necessary, reflecting the higher average costs of offering supported accommodation, compared to general needs.

“We will also consult on appropriate safeguards to ensure that this funding continues to support vulnerable people and promotes supply of supported housing.”

David Orr, chief executive, National Housing Federation, commented: “We welcome the fact that the government has identified the amount of money needed to underpin supported housing and that it remains committed to maintaining this funding. We are also pleased that there will be a ring-fence around the devolved funding and that the Shared Accommodation Rate will not apply to people living in supported housing.

“However, we are still concerned about how the new proposed model is going to work in practice. We want to put supported housing on a secure and sustainable footing for the long term and we are not confident that the new system will guarantee this. There are still many unanswered questions - for example the size of the devolved funding, whether it will receive an annual uplift, and how the process will work locally.

“We look forward to working closely with our members and the government on the consultation and the design of the new system. Our objective remains to secure a sustainable funding model which protects tenants and supported housing into the future.”

Lord Porter, chairman of the Local Government Association, said: “Applying the cap would have hit some of our most vulnerable residents and jeopardised many of the supported housing schemes that were due to be developed.

“The cap would also not have covered the higher rental costs of the supported housing sector to pay for the kind of specialist equipment and adaptations this type of accommodation requires. The alternative solution proposed by government, to ensure this is avoided, is testimony to the hard work of parties on both sides of the table.

“While the LGA would normally argue against ring-fencing funding, we understand the government's reasoning in this exceptional case, and feel that the prize here is very much worth that price.”