Safeguarding the future of supported housing

This week marked the end of the Government’s latest consultation over plans to change the way supported housing is funded in England. Here we take a brief look at the issues at stake for Midland Heart and our residents.

Supported housing plays a vital role in protecting vulnerable people from homelessness and enabling older people to maintain their independence at home. It offers a much more positive environment for residents and relieves pressure on the health service.

Midland Heart is a leading provider of supported housing with 7,000 supported homes across the Midlands. Since 2009 we have invested £27m in developing new supported accommodation, including a number of flagship extra care villages and homeless schemes. We are extremely proud of the role our supported housing plays in promoting independence and inclusion for vulnerable people.

Funding for this type of housing is complex and there is a risk that certain types of accommodation will not be compatible with welfare reforms. Government was right to launch a review in 2016 to address these issues.

Saltbrook HouseThe first set of proposals put forward would have seen the Local Housing Allowance (LHA) cap applied to the supported housing sector. Along with others in the sector, we had some serious concerns about how this would work in practice and were pleased when Government abandoned this plan last Autumn. We see this as a great example of politicians engaging with the sector to achieve the best possible outcomes.

Last October, Government published a second consultation paper, with proposals to split short term and long term accommodation into two different models. The short term model would fund accommodation such has homeless hostels and women’s refuges through a local authority block grant, whilst the long term model would continue to fund sheltered and extra care schemes through the welfare system but with a new overall cap applied.

The consultation closed on 23 January and Midland Heart have sent a response to be considered by Government.

Midland Heart response

We welcome the progress Government has made towards developing a more sustainable future for supported housing. Nevertheless, we still have some serious reservations about the model proposed.

Short term provision 

Along with other leading providers in the sector, we are particularly concerned about plans to transfer funding for short term accommodation to local authority block grants. Such an approach would end the principle of individual entitlement to benefits and create considerable uncertainty for providers looking to invest in new and existing schemes. We believe a better approach would be to continue funding most short term provision through the benefit system with a local authority block grant provided for a limited number of services where applying the welfare system would not be viable.

Long term provision

We agree with the direction of travel set out for long term supported accommodation but believe there are a number of key points that need to be clarified in order for it to work:

  1. Will Government exempt all existing provision from the new cap on rents and service charges to provide reassurance to existing residents and applicants?
  2. Will Government ensure rents and service charges can be revised each year in line with inflation? This is essential for the long term viability of schemes.
  3. Will Government develop a broad system of banding different schemes that recognises justifiable differences in costs across different types of accommodation?
  4. Will Government commit to a cap on benefit eligibility rather than overall rent and service charges? This is important because it helps residents and providers to manage costs for things like utility bills.

Next steps

The outcome of this review is very important to us as a leading provider and investor in supported housing, and to the thousands of people who rely on our services. We will continue to work with key decision makers to find a workable solution that safeguards the future of supported housing. .

You can read our full submissions to the consultation here:

Short term supported housing

Long term supported housing


24th January 2018 | 2018 | Public Affairs