(e) the accommodation is specified accommodation as defined in the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment)

Transcription

1 Welfare Reform and Work Bill Amendment- To remove supported housing which meets the definition of Specified Accommodation from the mandatory 1% annual reductions in rents charged by registered providers for the next four years Following Section 20, part (1)(d) insert the following wording: (e) the accommodation is specified accommodation as defined in the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 (SI2014 No. 771) Summary of the change Many of the supported housing projects provided to older people and to disadvantaged groups, such as homeless people, victims of domestic violence and 1

2 people with learning difficulties fall within the category of specified accommodation. The amendment adds specified accommodation to the existing exceptions to the mandatory rent reduction in the Bill. Where we use the term supported housing elsewhere in this document it refers to residential projects which meet the legal definition of specified accommodation. Why the amendment is needed Supported housing caters for a wide range of tenants with specific needs that require varying degree of support. This type of housing is already subject to very tight margins across the board; it relies on contracts for care or support services, and there are no alternative models for housing provision of this kind. Between funding for housing related support was reduced by 45% on average according to the National Audit Office, at the same time as demographic changes have led to greater demand and more complex needs. It is a part of the sector that is particularly vulnerable to any reduction in its income. The provision of supported housing is specifically designed to help disadvantaged people to achieve or remain as independent as possible and live healthy lives. It is unclear what would happen to the people currently living in supported housing, those who are already waiting for supported homes, as well as the increased numbers of people needing supported housing in the future. The impact could be increased A&E visits for homeless people, higher numbers of people with learning disabilities unable to move out of registered care, increases in rough sleeping and delayed hospital discharge for older people. The HCA has previously estimated that investment in supported housing results in a net cost benefit of around 640m per year 1 Impact if the reduction is implemented. As it stands, the rent reduction measure would lead to a loss of existing supported housing schemes for disadvantaged people e.g. older people, people who are homeless, people with mental health problems, people fleeing domestic violence, people with learning disabilities and others). There would also be a reduction in the number of schemes developed for this range of client groups, with housing associations already reporting that they are withdrawing from planned development. 1 uidance/financial_benefits_of_investment_in_specialist_housing_final.pdf 2

3 Housing associations financial modelling indicate the issue of viability applies to all types of housing association, large providers as well as small, when considering the feasibility of providing supported housing on a scheme-by-scheme basis. This means the question facing us is about the future of supported housing for disadvantaged and older people, not merely the future of individual organisations. The impact on accommodation for homeless people with support needs demonstrates how damaging this change would be on supported housing as a whole. Over 90% of residential homelessness services rely upon Housing Benefit as a key funding stream One homelessness organisation in the North-East of England has modelled the impact of the change on the 300 beds of supported accommodation they provide which accommodate 1,400 disadvantaged people each year. The impact of the 1% rent reduction, assuming other costs increase by between 2% and 3% per year, is that 50% of their accommodation projects would be financially unviable in 2016/17 and 100% financially unviable by 2017/18 A second organisation, St Mungo s Broadway, provides accommodation and support to 3,800 people each year across London and the south of England. They estimate that the 1% annual rent reduction requirement would result in the loss of 1.25 million in rental income to them by year four - between 250,000 and 300,000 each year. Taking into account the rental income they had anticipated over this period, the overall impact on the organisation s finances over the four year period is 4 million. This loss of income would force some projects to close resulting in the loss of accommodation for homeless and disadvantaged people. Who will be impacted? Homeless Link research 2 shows the vulnerability of the people who use these types of homelessness services and who will be at risk if they are forced to close.. 8% have a learning disability 13% have physical health problems 19% have recently slept rough 22% have a history of offending 23% have alcohol problems 30% have drug problems 2 %20Single%20homelessness%20support%20in%20England% pdf 3

4 32% have mental health problems 38% of people have a combination of these support needs. Non-Homelessness Services As mentioned this change would have an enormous impact on services working with other disadvantaged people. Some examples include: A large national provider of supported housing who estimates this change would lead to the loss of 104 schemes, removing 1969 support spaces for clients including 228 spaces in domestic violence services. A small specialist learning disability provider who will have their operating margins reduced to 0.2% and will be forced to cancel all their proposed development of learning difficulty schemes A large national organisation who will be forced to reduce planned development of extra care by 400 units, including units built specifically to help people home from hospital Specified Accommodation The definition of specified accommodation 3 covers residential dwellings including shared houses, hostels, refuges and some self-contained accommodation which is owned by a registered provider and where disadvantaged individuals receive housing-related support either from a third-party or from their landlord. There is already an agreed process for identifying housing that meets this definition, Supported housing that meets this definition will therefore be the housing where tenants require greater levels of care and support, and would be harder to replace once lost. Precedent The principle of treating supported housing separately from other social housing for Welfare Reform purposes has already been recognised in the proactive decision by the last Government to keep housing costs for specified accommodation out of Universal Credit and Benefit Cap calculations. Failure to recognise this in the current legislation is not only inconsistent with previous policy 3 7/a pdf 4

5 but places at risk the steps Government has already taken to protect housing for the most disadvantaged. Conclusion The Government has previously taken steps to protect supported housing from the unintended consequences of Welfare Reform. Unfortunately, if this reduction goes ahead then many supported housing providers will no longer be able to fund the essential requirements needed to provide a safe and secure environment in a decent standard of accommodation. There is already evidence that current reductions in funding mean some supported housing projects struggle to accept the most complex and disadvantaged people. Furthermore many services will not be able to adjust to the changes to projected income on which financial decisions have been made may have to close. Exempting specified accommodation, as with previous benefit changes, presents a straightforward solution because the definition already exists and was agreed after two years of work between the Government and charities. The definition has been in place for over a year and has worked well in protecting supported housing for the most disadvantaged. Contact Paul Anderson Policy Manager Homeless Link paul.anderson@homelesslink.org.uk 5