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MPs call to scrap plans to base supported housing allowances on private sector rates 11/05/2017

From 2019/20, a new funding model for supported housing is to be introduced. Ministers said this will ensure that the sector continues to be funded at current levels taking in to account the effect of the government policy on social sector rents.


Shortly before the dissolution of Parliament, the Work and Pensions and Communities and Local Government Committees concluded, in a joint report on the future of supported housing, that the government should scrap plans to base rent allowances for supported housing tenants on rates used for claimants in the private rented sector.


The Committees report, published on 1 May, says it is inappropriate to use the Local Housing Allowance (LHA) rate and argue that a new Supported Housing Allowance, banded to reflect the actual cost of provision in the sector, should be introduced instead. The Committees note concerns that the proposed reform could lead to a serious shortfall in the availability of supported housing.


The report concludes that Ministers are right to consider an alternative funding mechanism for emergency accommodation, given the inability of Universal Credit to reflect short-term changes in circumstance. The Committees recommend grants to local authorities, which can commission accommodation and pay providers.


It also calls for a separate funding system for women's refuges and urges the government to work with Women's Aid and providers to devise it. The Committee says it is essential that refuges are able to operate as a national network, unrestrained by local admissions restrictions.


Under the current proposals for supported housing, core rent and service charges for supported housing tenants would be funded up to the level of the applicable LHA rate. For costs above this, the government would devolve ring-fenced top-up funding.


The Committees agreed with the need to find a long-term, sustainable funding mechanism that ensures quality, provides value for money, and which protects and boosts the supply of supported housing. However, they were concerned the government's funding proposals, as they stand, are unlikely to achieve these objectives.


The Committees report also concludes that the Local Housing Allowance (LHA) rate is an inappropriate starting point for a new funding mechanism for supported housing. The LHA rate is a measure for general needs housing in the private rented sector and bears no necessary relationship to the cost of providing supported housing.


The Report finds that the cost of provision is largely consistent across the country, unlike the LHA rate, and consequently, some areas will rely more on top-up than others. As this is considered a less secure funding source, the Committees are also concerned that providers will be put off investing in certain areas, creating a disparity between the supply of homes and services across the country.


Read the full report and recommendations.

It will be interesting to see the response of the incoming Government to the report following the General Election on 8 June.

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