6 November 2017

There is a saying that you if you stay working at one place for long enough then sooner or later all the old systems that were swept away for being old-fashioned and inefficient will eventually be reintroduced as cutting-edge and ‘the way of the future’. Well I’ve been working in supported housing for twenty-five years this year so I’ve had more than my fair share of déjà vu moments in that time. And I had another one when I saw the government’s proposals for the future funding of short-term supported housing on Tuesday.

Back in 2003 the then-Labour government launched – to great fanfare – new funding arrangements for supported housing called the Supporting People framework. The funding was ring-fenced for the provision of support to the most vulnerable. It was administered by local councils and paid directly to support providers in the form of block grants, in return for them meeting, for the first time, certain minimum standards. The intention was that there was high-quality support available to vulnerable people to ensure that the issues which had caused them to require supported housing could be addressed. And it worked. Homelessness and rough sleeping both fell year-on-year every year.

Perhaps inevitably however, after the financial crash of 2008 the government was looking to make savings on welfare spending and Supporting People was one of the areas in which they looked. First the budget was frozen, then it was cut, and then the ring-fence was removed so local councils had discretion on how they could spend the money – it didn’t have to be spent on actually providing support anymore. In an era when local councils were facing huge cuts in other budgets, suddenly finding they had a big pot of money over which they had complete discretion proved an irresistible temptation. Suffice to say, the Supporting People system was slowly dismantled. The result? Every year since 2010 homeless and rough-sleeping have increased.

Recognising this, in 2015 the (now-Conservative) government announced a review of how supported housing would be funded. Their first attempt at a proposal last October was basically an exercise in further budget costs and restrictions. Independent analysis showed that it would have led to the wholesale closure of supported housing schemes. So the government went back to the drawing board. The results of their second review were released this week. If you care about the number of people who are now sleeping rough on our streets then this review should matter to you because it has the potential to make the situation better – or immeasurably worse.

The proposal now being made is to fund short-term supported housing by way of a block grant administered by local authorities. This new fund will be ring-fenced specifically for the provision of supported housing. It will be paid directly to supported housing providers in exchange for them meeting minimum quality standards. Sound familiar?

Unfortunately, all of the issues which caused the collapse of the old Supporting People system remain unaddressed in the government’s new proposals. For instance:


1.How secure is the providers’ income level?

The consultation document talks about providing ‘security of funding’ but there seems to be no proposal to index-link future funding levels. We know from bitter experience that when the government wanted to save money they just froze and then cut the Supporting People grant so local councils had less to administer. Providers were then simply expected to provide more bricks using less straw until eventually there was virtually no straw left.


2.How secure is the income stream?

At the moment, providers receive at least a basic level of income from the housing benefit system. This doesn’t pay for support, but it does mean that irrespective of funding for support, supported housing providers can continue to meet their mortgage payments. In future however, there will be no housing benefit element. All of the money will be administered by a single discretionary grant from the local authority. But they will be required to recommission – and potentially decommission – services regularly as part of the drive to ensure both the continuing ‘strategic relevance’ of the services and value for money. This matters because the construction of supported housing has to be funded in the first place, and at least some of that funding will come in the form of a mortgage. Why would a bank lend money to fund a new supported housing scheme (or the refurbishment of an existing one) if the scheme might lose 100% of its funding at any point? And for those of us already paying mortgages, will we now face a big rise in our interest payments – or even the withdrawal of our loan facility altogether – because our funding is now so much less secure?


3.How secure is the ring-fence?

The government have sought to provide reassurance to providers by insisting that they intend to retain a ring-fence over the funding well into the future. But of course, Supporting People was ring-fenced too – until it wasn’t. Homeless people are not typically the government’s most pressing concern and, as we learnt to our cost previously, when difficult spending decisions have to be made the simplest thing to do is often to cut the funding of those least able to complain. And if you don’t have an address you can’t register to vote.

There are some positives in the proposals too. Taking the whole funding system out of the welfare system means that people in short-term supported housing will be able to get a job without it having any effect on their housing benefit entitlement. They are guaranteed to be better off in work than on the dole. That is a big win for vulnerable people.

But the government still has some way to go to convince the sector that it intends to learn from the mistakes of the Supporting people framework, rather than simply repeat them.

Alan Fraser is Chief Executive of YMCA Birmingham