Rent cut exemption only a halfway house for supported housing

Carol MatthewsThe one-year rent cut exemption for supported housing only partly solves the problem, says Carol Matthews

The government’s announcement at the end of last month of a year-long concession on rent reductions for sheltered, extra care and supported housing is a welcome step in the right direction.

For Riverside this means greater security for over 8,000 tenants living in schemes that make up the most financially marginal part of our operations, with many schemes cross-subsidised from elsewhere.

And this is not a result of inefficiency – our care and support services sit in one of the most efficiently-run parts of Riverside, which has had to respond to a torrid succession of funding cuts over the past years.

It’s simply because the provision of housing management and maintenance services are 30% higher than the equivalent for mainstream housing, linked to high re-let costs – many schemes turn over two or three times a year – significant amounts of wear and tear, and the time it takes to undertake routine management tasks with vulnerable residents. Of course, the historic cost of provision is usually so much higher, too.

Grand ambitions

This is why the case is overwhelming for treating tenants living in this type of specialist housing differently in the benefit system, and it is good that the government has listened.

However, we are only part of the way there, with the bigger threat of Local Housing Allowance (LHA) caps for all social housing tenants still casting a long shadow. At the close of the heady day of parliamentary debates recently, National Housing Federation chair Baroness Warwick was right to point out that the government had two opportunities to specifically reassure the sector in the face of concerted pressure, but had failed to do so.

But I sense growing momentum, with the government going on the record about bringing forward with urgency “appropriate protections for those in supported housing”. Lord Best, who has done so much to support the sector and secure the rent concession, suggested that government will eventually move to address the LHA issue, perhaps when the current “fuzziness” about numbers becomes clearer.

So the focus of our attention now needs to turn to the review of the whole system of costs associated with supported, sheltered and extra care accommodation, set up when government realised that the blunt rules of Universal Credit would not do. So what do we know?

We know that Ipsos Mori has been appointed as lead contractor to establish a baseline position, reporting in March – just how much of this accommodation is out there and how much does it cost, especially in terms of the benefit bill? This will then be used to inform decision-making about policy, which if it is to ensure that a clear position can be established for next year’s rent variation and budgeting processes, will need to be in place by Christmas at the latest – already sounding ambitious to me!

Going into the review, I think housing associations and those commissioning services need to be looking for four things:

  • Complete transparency of process, and the meaningful involvement of the providers and commissioners. Given what was said in the Lords, I think we’re already on a promise, however we need to ensure we are at the centre of the review, rather than on the periphery;
  • That whoever administers a new system going forward, it needs to be based on the principle of basic national entitlement. One option would be localisation, however it would be outrageous if general needs tenants who meet national criteria are automatically entitled to state support, whereas vulnerable tenants living in specialist accommodation are only entitled to support if they meet local, politically set, criteria and if there is enough cash;
  • That the system is adequately funded and protected. Government has said that this is not a cost-saving exercise, and this needs restating. Too often we have seen the localisation of budgets accompanied by centrally-imposed reductions. And if funding is localised, it needs to be ringfenced;
  • That some form of uprating mechanism is built in, so the funds available grow to meet changing needs and we can avoid returning to this issue year after year.

Of course, some sort of efficiency test is also needed. The Department for Work and Pensions will demand no less, and we need to show that we understand this, albeit in a nuanced way.

So let’s prepare for an interesting year. It will go quickly, and while rent reductions may be off the agenda (for now), and hopefully LHA caps too, we need to deploy our expertise and evidence to ensure we don’t jump out of the frying pan and into the fire.

Carol Matthews, Chief Executive, Riverside

First published Inside Housing 12 February 2016

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