13 Feb 2017
“Devastating” proposals for a new funding regime threaten both existing and future sheltered housing, according to a joint submission by the three largest specialist providers.
Anchor, Hanover, and Housing & Care 21 warn the proposals could lead to an up to £64m annual shortfall across their services. It comes in a joint response to the government consultation on funding for supported housing, which closes today.
The combined rental and service charge costs for sheltered housing are generally higher than Local Housing Allowance (LHA) levels, reflecting the additional services that make it so effective and valuable. Capping Housing Benefit at LHA levels, as proposed, means many residents could be left with a shortfall between their benefit entitlements and the cost of their homes.
The government’s proposed new funding model seeks to protect the sector from the impact of the planned cap on Housing Benefit from 2019 onwards, through ring-fenced top-up funding administered by local authorities.
However, the organisations say the protection being offered is not fit-for-purpose and will lead to a postcode lottery, with the north and midlands hit significantly harder than the south. They also highlight experience from the Supporting People regime, where funding was cut and the ringfence removed.
The three organisations call for sheltered housing to be exempt from the proposals. Or if this is not possible, the decision should at least be delayed until 2022 to allow for the implementation of Universal Credit.
If the proposals go ahead, there should be a specific cap for specialist housing for older people to reflect the cost of the additional facilities provided.
The joint submission warns uncertainty about future income also impacts on providers’ ability to invest in new developments. It states: “The proposed changes to the funding for supported housing threaten to devastate the sector’s ability to maintain current levels of specialist housing, let alone develop to meet increasing demand.”
Analysis by Frontier Economics for the Homes and Communities Agency in 2010 showed the net financial benefit to other services from older people in specialist housing compared to other forms of housing was £444 per person per year.
A joint statement has been issued by the chief executives of the three organisations.
Jane Ashcroft of Anchor, Clare Tickell of Hanover and Bruce Moore of Housing & Care 21 said:
“The proposals create huge uncertainty for older people and risk breaking a part of the housing system that works well.
“With an ageing society and growing pressure on the NHS, sheltered housing has never been in greater need. There is strong evidence that investment in such services saves money for the state.
“The Housing White Paper talked about the merits of older people downsizing. Yet these proposals could have the opposite effect - reducing the number of properties available to do just that.
“We are glad the government are listening to concerns. It’s crucial that now translates into action.”
The organisations estimate the difference between the LHA cap and the rent and services charges on their homes will total £64 million a year if such a cap is introduced and the 1 bed LHA rate is applied to all sheltered housing. This reduces to £58 million if the 2 bed LHA is applied to those living in 2 bedroom properties.