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Announcement on future funding of supported housing 15/09/2016

Damian Green Secretary of State for Work and Pensions has made an announcement on the future funding of supported housing.


In a Written Statement to the House of Commons, the Secretary of State announced that having listened to concerns regarding the application of the Local Housing Allowance (LHA) rates to social rents from 2018, the government will be deferring the application of this policy for supported housing until 2019/20. This is when the government will bring in a new funding model which will ensure that the sector continues to be funded at current levels, taking into account the effect of the policy on social sector rents.


The statement makes it clear that from 2019/20 core rent and service charges for supported housing will be funded through Housing Benefit/Universal Credit up to the applicable LHA rate. This will apply to all persons living in supported housing from that date. However, the shared accommodation LHA rate (which limits rent eligible for Housing Benefit for the under 35's) will not apply to people living in supported housing


For supported housing costs above the LHA rate, the government will devolve an amount of funding for disbursement locally to provide additional "top up" funding to provider landlords (it is not clear but it is assumed in England this will be to first tier authorities). This top up funding will be "ring fenced" but it is not clear how long for. 


Rents for supported housing (which were exempted from the 1% rent reduction in 2016/17) will be subject to the mandatory 1% rent reduction from April 2017, up to and including 2019/20. However, the existing exemption for "specialised supported housing" will remain in place and will be extended over the remaining 3 years of the policy for fully mutuals/co-operatives, alms houses and Community Land Trusts and refuges.


The government will publish a formal consultation document shortly.

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