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London council defunds supported housing contract over ‘significant inflationary pressures’
A London council has defunded a supported housing contract so it can adequately fund the rest of its providers.
Lewisham Council agreed to remove the £250,036 annual funding for Phoenix Futures, which supports homeless people to address substance misuse, and use it to fund other supported housing providers.
This will help the local authority address “significant inflationary pressures” and ensure “properly staffed, quality and safe service provision”.
The contract will now end in April 2024, three years early.
Lewisham’s mayor and cabinet approved financial uplifts for its other supported housing contractors, which total £481,412 a year and are funded by the Phoenix Futures money and additional investment from the council and care providers.
It also agreed a smaller one-off payment to providers for 2023-24 in “recognition of the current and urgent inflationary pressures identified”, totalling £250,000.
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According to a report that went before the mayor and cabinet in September, inflationary pressures and a lack of investment over a number of years in supported housing, in Lewisham and nationally, has led to “significant cost pressures across the sector”.
“Recent high inflation has exacerbated this, causing staffing and service issues, increasing risk to service users, and the risk of unplanned service closures and provider failure.
“The current financial envelope in Lewisham therefore was insufficient to continue to provide the same quantity of provision at the levels of quality and safety required,” it said.
According to the report, there was an overall funding pressure of £481,412.
“Due to the council’s financial position, investment in these services has reduced from £13,901,015 in 2010 to £4,478,101 in 2019, or a 68% cut, with a commensurate reduction in commissioning staffing.
“Cuts to date have been through significant staffing reductions across the board, and through service closure, particularly large reductions in lower-support accommodation.
“As far as possible, these cuts have been made working with providers to reduce costs and maximise other income to minimise service closures,” the report said.
A Lewisham Council spokesperson told Inside Housing: “As a council, we need to make sure that we’re providing enough financial support to providers to deliver good-quality and safe supported housing.
“As supported housing services have become more expensive to run in recent years, we have to make a judgement about the number of services we are able to properly fund.
“It’s in this context that we’ve made the difficult decision to end funding from April next year for one of 19 services that we fund – the supported housing service on Bromley Road.
“This will enable us to increase the funding to other supported housing services that we commission, ensuring that they are properly supported to deliver consistent, high-quality and sufficiently staffed accommodation to some of our most vulnerable residents.
“All residents at the Bromley Road site will be supported into alternative accommodation before the current service ends on 31 March next year.”
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