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New funding system ‘could be based on supported housing allowance’
The new funding system for supported housing could involve a specific ‘supported housing allowance’ as recommended by two select committees, sources have said.
Yesterday, Theresa May axed long-standing plans to cap housing benefit in the social housing sector at Local Housing Allowance (LHA) rates, promising detail on a new plan to fund supported housing next Tuesday.
Senior housing figures have been briefed ahead of the publication of these plans to expect a system similar to that recommended by a joint Communities and Local Government Committee and Work and Pensions Committee report in June.
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The housing figures told Inside Housing that the government is considering a funding approach that recognises the varying costs of different types of supported housing by setting up a national supported housing allowance.
The plans could include older people’s housing, funded through the pension credit or tax credit system, and temporary accommodation funding paid directly to providers, rather than through individual tenants’ rents.
This could avoid the build-up of arrears due to the six-week waiting period for the first Universal Credit payment.
A senior housing sector source said the government’s message is that “the solution won’t satisfy everyone in the sector but should be good enough”.
A spokesperson for the Department for Work and Pensions would only say that details on the future funding model would be announced next week.
The housing sector has waged a long lobbying battle against the government’s plans to cap housing benefit in the social housing sector at LHA rates – to match the funding situation in the private rented sector.
Announcing the LHA cap climbdown on Wednesday, Ms May said: “We will not apply the Local Housing Allowance cap to supported housing – indeed we will not be implementing it in the wider social housing sector.”
Associations had shelved development plans because of uncertainty over supported housing funding and charities had warned that under-35s would particularly struggle to find accommodation they could afford under the plans.
Sector figures welcomed the U-turn, with Home Group immediately committing £50m to build out three schemes stalled by the uncertainty.
David Orr, chief executive of the National Housing Federation, praised the government for listening but said it was “deeply frustrating” that “much good and useful work” had been wasted during the two years it took to scrap the policy.
Labour, which had called a debate on the issue due to start hours after Ms May’s U-turn, warned that the “devil will be in the detail – and the funding”. The government had anticipated a £520m saving from the cap by 2020.
