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Associations pull 85% of planned supported housing developments
Housing associations have slashed the number of supported housing homes they plan to build by 85%, as uncertainty around government reforms to the sector stymie development.
The National Housing Federation (NHF) said the dramatic drop in development is due to uncertainty over the introduction of the Local Housing Allowance (LHA) cap. The government was meant to publish a Green Paper on the future of supported housing during the spring but this has not yet materialised.
The NHF’s survey of 69 housing associations which together provide a third of supported housing revealed they had previously planned to build 8,800 units of supported housing but now had a total pipeline of just 1,350.
Those who provided additional detail in the survey said 71 schemes representing 2,185 homes have been postponed, 19 have been cancelled outright, and 25 existing schemes are threatened with closure.
The NHF said the main reasons given for these closures and delays are uncertainty about the government’s proposed funding model and the withdrawal of funding for support services.
Where schemes are going ahead, two key reasons were cited: 24% estimate the local cap on housing benefits would be high enough in their area to cover their costs, and 18% believe their shortfall would be offset by government funding.
Housing associations previously called for the government to set up a separate supported housing fund that was backed by both the Communities and Local Government Committee and the Work and Pensions Committee, which recognised that the basis for the government’s proposed system was not “a competent starting point” because it is based on the private rented market.
David Orr, chief executive of the NHF, said: “These findings really bring it home: changes to supported housing funding are stopping building for the most vulnerable. Housing associations know first-hand that the proposed funding model will not work – a view backed by a joint select committee – and yet government has failed to heed warnings.
“With social care in crisis, the role supported housing plays in alleviating pressures on the NHS is ever more important. These changes have not even come in yet and they have taken 7,000 homes for vulnerable people out of the pipeline.
“The proposed changes in funding bear no relation to the real cost of providing this type of housing. It is time government put supported housing on a secure and sustainable footing.”
A Department for Work and Pensions spokesman said: “We fully support and appreciate the valuable role supported accommodation plays in providing care in our local communities. Our new funding model will secure the future of supported accommodation and ensure help goes to those who need it the most. We have consulted fully on the new model and have been clear we will set out the next steps soon so that the supported housing sector has the certainty it needs to deliver in the future.”
Case study: Riverside
Riverside is one of the housing associations with supported housing schemes on hold. It has paused a development of 50 homes for homeless veterans because it is facing a funding gap once the LHA cap kicks in.
The shortfall for people living in a one bed flat with high levels of support would be around £116 a week and almost £76 for those living in a flat offering a move-on facility.
The local council cannot commit to funding the gap. The annual shortfall in rent in the first year of operation would be £260,000 representing 49% of total rental and service charge income.
