When Theresa May announced that the policy of capping housing benefit payments to LHA rates for supported housing was being abandoned, everyone assumed that the disaster facing the sector had been averted. Mrs May indicated that she wanted a new policy, one that would give supported housing providers the financial security they needed. It was assumed from this that the austerity-driven policy of George Osborne was being replaced with a more sensible policy that would protect the poorest and most vulnerable. The press and the Opposition in parliament announced it as a major U-turn.
Except that it now appears that, for short-term supported housing at least, it wasn’t a U-turn at all. Whilst it is true that housing benefit payments will no longer be capped, that is only because they are being withdrawn altogether. In place of statutory funding, short-term supported housing providers will have to make do with a pot of discretionary funding over which local authorities will have total control. Councils will be no longer be required by statute to pay all rents deemed reasonable regardless of their financial position, as they are at present. Instead, they will be given a fixed pot of money to do with as they see fit. Far from having to use market rent levels as an objective reference point, they will instead be placed under a new statutory duty to secure value for money. Anyone who had any experience of Supporting People funding knows exactly what that means. They will also be aware exactly how worthless the government’s promise of a ring-fence for the funding is. Let us also not forget that we have just secured a new rent guarantee at CPI+1% from 2020 for general needs housing. Needless to say, there are no guarantees about the future size of the new discretionary pot. So far from providing greater security of funding, the new proposal removes funding certainty altogether. It is, quite literally, even worse than the LHA cap policy (which at least guaranteed funding at LHA levels.)
Not surprisingly sector figures have been queueing up to denounce the proposals. From Terrie Alafat at the CIH, to Denise Hatton at YMCA and Katie Ghose at Women’s Aid, the new policy was met with dismay. Except, at the National Housing Federation. Alone amongst senior sector figures, David Orr announced that the new policy was “hugely welcome”, “sensible” and “a radical change that could work very well.” Incredibly, he went on to say that the new policy offered “the promise of certainty to help providers plan long-term investment with confidence.”
Let’s be clear what is proposed here: statutory funding for short-term supported housing is being withdrawn altogether and replaced with discretionary funding. That cannot provide greater funding certainty.
This is not a U-turn, it is a turbo-charging of the government’s previous policy. It is not a climb down, it is a determined stepping up of the government’s campaign to cut the benefits bill regardless of the impact on the weakest and most vulnerable. Far from representing a victory for the sector, it represents a crushing defeat – a defeat which has been facilitated and supported by the very organisation that we thought was fighting on our behalf. The NHF must be the first lobbying group in history that has spent two years lobbying against the interests of the organisations it is supposed to represent in order to make dangerous government policy proposals even worse.
The supported housing sector deserves better.
Alan Fraser is chief executive of YMCA Birmingham