I beg to move,
That this House has considered the effect of Government proposals on supported housing.
It is a pleasure to serve under your chairmanship, Mr Howarth. I thank hon. Members for their attendance. I formally congratulate the Under-Secretary of State for Welfare Delivery on her newish role—this is the first chance I have had to do it publicly.
We are here to talk about the effect of Government proposals on supported housing. Once again, this is a Government targeting a significantly disadvantaged group with ill-thought-through plans that will have long-term negative cost effects and which have already had a negative effect on the provision and supply of supported accommodation. In a September 2015 Department for Work and Pensions release, the then Secretary of State stated:
“Supported housing supports hundreds of thousands of the most vulnerable people across the country”.
Some of them are on crutches. The Department’s definition of vulnerable people covers older people, homeless people, people fleeing domestic violence, people struggling to overcome drug and alcohol addictions, and disabled people, including many people with mental health conditions and learning disabilities. Those are the people who use, and need, supported accommodation.
In 2010, the Department for Work and Pensions published a report that suggested that of people living in supported accommodation 25% had a learning disability, 42% had a severe disability or a physical disability, 17% were recovering from addiction, 5% had a significant mental health problem and 5% were fleeing domestic violence. We must ask ourselves why any Government would choose to make life more difficult or more uncertain for those groups of people. We are talking about a truly shabby policy on top of policies since 2010 that have significantly targeted, again and again, disabled people and other disadvantaged groups with cut upon cut. I will outline what the Government say they intend to do and why so many organisations and people have significant concerns.
I am sure that my hon. Friend will remember that only weeks ago we had a debate on homelessness in the House of Commons, and a motion was passed. I am interested to know how that motion can be implemented when there is a situation like this with regard to homelessness, particularly with capping going on. That is surely a contradiction in terms.
It is an absolute contradiction. Since 2010, we have seen a shocking rise in homelessness across the country, particularly in my constituency. I did a sleep-out for the Robes Project there last Friday evening, in very cold temperatures, so if Members have not already done so I urge them to sponsor if not me the project more generally.
In the 2015 spending review the Government outlined plans to cap the—
I congratulate the hon. Gentleman on securing this important debate. He seems to be a bit stuck in a time warp from several months ago. Does he not recognise that the situation has changed and that there is a commitment to a new funding model based on localism, which should help with the allocation of resources so that those most in need will get the most help?
I am about to run through how the Government have ended up where they are now, but when it comes to localism, this Government have a record of devolving responsibility without the resources to meet the demand. That point should not be lost, as it is an important factor in how many organisations see the current consultation.
Coming back to last year’s announcement, the Government said that they would cap the amount of rent that housing benefit will cover to the relevant local housing allowance—the LHA—for supported housing, with a top-up paid by local authorities. Initially, they announced that the measure would apply to those who had signed a tenancy since April 2016. There was an immediate backlash, and it was clear that the Government had not properly thought through the plans or considered very well whom they would affect. They then announced a delayed roll-out of the change, initially for one year.
The hon. Member for Solihull (Julian Knight) alluded to the fact that there is now a consultation on further plans for a 2019 roll-out, including of the new funding model, but it should not be forgotten that the cap poses a considerable risk to supported housing as it might be insufficient to cover full costs for the people affected. Management costs for supported housing are significantly greater than generic housing costs. The limbo period has already caused some damage.
Alongside the delays to 2019 for both the change and the proposed new funding model, the Government have announced further damaging changes in addition to the proposals that they outlined last year. They have now included suggestions that will affect all universal credit claimants when the change is rolled out in 2019, not just those who have signed a tenancy since April 2016. There is concern among many organisations that the universal credit system is too clunky and inflexible to take into account what the Government had originally planned. It would be useful if the Minister indicated whether it is a “computer says no” approach rather than the flexible model that perhaps is needed. In another damaging change, the Government are applying a rent reduction to supported housing, with rents decreasing by 1% a year for three years up to and including 2019-20. That was not in the original plans and it has caused much dismay among the organisations and people affected.
I applaud the hon. Gentleman for bringing to the House this debate on a very important subject. Does he not agree, however, that it is local authorities that know where best to place the money and whom to help the most? That is what the new funding model will address. I am a firm believer that money should not come from the top, but locally. That is how best to spend it. I would welcome clarification about whether the funding will be ring-fenced. I believe that the Minister will promise that, but I am sure that the hon. Gentleman would like to hear that that is the case.
I congratulate my hon. Friend on securing this very important debate. Does he agree that as part of Government proposals regarding the provision of supported social housing, recognition needs to be given to the best locations, with good access to hospitals and other public services, as many of the people concerned are vulnerable and require care?
Location is important, and I will come on to discuss where needs are best met. For too many of the people directly affected, that has been in NHS accommodation, which has been inappropriate and at far greater expense, but the Government’s plans do not address that.
I do not think we should let the hon. Member for Taunton Deane (Rebecca Pow) get away with what she said about passing responsibility on to local authorities. That is a cop-out. Local authorities can do the work with Government resources but if they are not given those resources all that happens is that they get the blame and the public suffer.
It is the individuals who need the accommodation who suffer, and also the taxpayer in the longer term, for reasons I will come on to.
I want to give some national and local statistics. It is estimated by the House of Commons Library, which I thank for the figures, that there are 651,000 supported accommodation places across the country. That is not a massive number, as accommodation goes. Across my borough of Southwark, there are 1,200 places in a range of schemes.
I want to flesh out a bit more who is affected, by citing a couple of anonymised case studies from AmicusHorizon. The first is Mrs W, who is disabled and lives on her own in sheltered accommodation. She has no close family, and has mobility problems, a visual impairment and a learning disability. That is who the Government are targeting. She lives in sheltered housing, which means that she is in an accessible and supportive community with unobtrusive support from a scheme manager who operates as a kind of warden. That support enables her to live independently. Her combined rent and applicable service charge is £123.10, which is £57.44 more than the applicable LHA rate.
The second case study is that of Mrs P, who lives in an extra care scheme. She lives on her own and does not have contact with her children. She moved to the scheme after a spell in hospital because of a fall. In the accommodation her health has improved and the staff provide support to ensure that she stays well and is able to get out more and attend social activities. Without that support she would be in residential accommodation at potentially higher cost. Her combined rent and applicable service charge is £174.71, which is £64.04 more than the applicable LHA rate. Golden Lane Housing, which is a Mencap subsidiary, provides homes for people with very complex needs in my constituency, including people with learning disabilities. I visited its accommodation in Rotherhithe, and the people being supported there do not just have severe learning disabilities; they also have communication impairment. One was deaf and could not speak, and that is who the Government are targeting with the change. The wraparound support that those people need is absolutely essential, and by its very nature it is more expensive than routine housing costs.
St Mungo’s is another brilliant local provider of emergency and supported housing in Southwark. It helps people out of homelessness, and helps people with high support needs. In its client group, as it calls them, in Southwark, 53% have slept rough; 73% have mental health needs; 44% have a significant physical health condition; and 55% have or have had a substance misuse problem. As well as providing shelter for those people, St Mungo’s runs workshops that improve life skills and help many residents to avoid more intensive NHS services and to stay out of the criminal justice system.
The Government’s plans from last year and from before that simply do not take into account the broader benefits of supported housing. First, there is the social benefit. Supported housing gives people who would otherwise struggle to live independently control and choice over their lives while allowing them to receive essential support. There is the human, personal benefit of supported housing. There is also a financial benefit. The cost of supporting people in specialist supported housing can be half the gross cost of residential care placements. Lifeways estimates that the average net saving achieved by moving from residential care to supported accommodation is at least £185 a week.
There is a clear cost saving available if we get the policy right, but the Government have failed to do that. The lack of specialist supported housing is pushing people with learning disabilities, dementia and a range of conditions into more expensive residential care, including hospitals. The National Housing Federation states that stable and certain funding for supported homes and services reduces pressure on public services such as the NHS, saving the taxpayer around £3.5 billion a year. That is the potential saving from getting this right.
I thank all the organisations that have given me briefings or meetings on the issue, including the National Housing Federation, Golden Lane Housing, Lifeways, AmicusHorizon, the London Borough of Southwark, St Mungo’s, the Salvation Army, which I think is here today, and London Councils. Their involvement and all the supported accommodation that they provide has built up in the years following the extensive shift in public policy to enable disabled people to live more independently. In particular, that shift was meant to support disabled people to live outside NHS accommodation and residential care. That reflects a demographic shift, and we need to be aware that we have an older disabled population. We should celebrate the fact that more young disabled people are surviving into adulthood, but that comes at a cost. They need more support. In Southwark, the fastest growing cost group to social services is 18-year-olds with learning disabilities. Mencap estimates that that group alone requires the provision of 1,000 new places a year in supported accommodation.
There are some worrying statistics on how things will be directly affected by the Government’s proposals. Golden Lane Housing has suggested that 82% of local authorities agree that there is a shortage of supported housing for people with a learning disability. More worryingly, 41% of current schemes could be at risk of closure if the Government do not shift their plans. Some 80% of schemes due to be built to support that group would cease and not go ahead, leaving many disadvantaged people unable to access the homes and support they need and directly undermining Government efforts to provide supported housing in the community as part of the Transforming Care programme.
All of that has been put at risk by the mess, limbo and confusion from Government on the issue. There has been a clear lack of co-ordination across Government, with a rush to continue the squeeze on budgets without thinking more strategically or for the longer term. In September, the new Secretary of State said:
“The Government values the role supported housing plays and is committed to protecting and boosting the supply of supported housing”.
However, DWP policies have put existing and planned supported accommodation at risk. For example, Golden Lane Housing had to postpone a £100 million five-year bond to provide supported housing. It would not have relied on a penny of public funding. It is also likely to have to turn down a £500,000 grant from the Homes and Communities Agency it applied for under the care and specialised support initiative to develop new homes. Accommodation has been put at risk as a direct result of the Government’s confusion on the issue.
Unable to meet higher needs, the executive director of operations at AmicusHorizon said:
“The impact of the cap will be more than £1 million of annual rent and service income being put at risk. It will also have a significant impact on our residents. None more so than those living in extra care schemes. We’ve calculated they will have to fund an average shortfall of £41.00 per week”.
The Government have said that
“from 2019/20 core rent and service charges will be funded through Housing Benefit or Universal Credit up to the level of the applicable LHA rate…For costs above the level of the LHA rate, Government will devolve in England an amount of funding for disbursement locally.”
Very little detail has been provided, and there is an ongoing consultation on the issue.
Lifeways is based in my constituency and provides accommodation for more than 5,000 people with learning disabilities across the country. It has commented on the uncertainty that the Government have created and the lack of clarity in the funding model:
“The current uncertainty about the future funding of specialist supported housing is putting at risk our ability to deliver high quality, permanent homes in local communities...The new funding model currently been consulted on needs to ensure that the money devolved is sufficient and gets passed on to the right people. People with learning disabilities must not be overlooked.”
I thank the hon. Gentleman for giving way again; he is most generous. We have had lots of detail from him on what he sees as wrong and so on. I am a member of the Select Committee on Communities and Local Government, and we have heard quite a lot of evidence on this, but I wonder what he proposes to do about the matter. Does he think that the status quo is the way to progress ad infinitum, or does he have any concrete proposals?
As I have outlined, if the Government introduced concrete proposals and knew what they were doing, we would not be in this position. I have some specific recommendations for how the Government might go forward, even though I fundamentally disagree that this group of people should be targeted for a reduction in support.
Lifeways has expressed concern about the fact that providers need confidence to invest and build. The Government’s position since September last year has undermined that confidence and caused some schemes to be put on hold or cancelled altogether. Some providers of supported accommodation have said that they will pull out of the sector if the policy is not done in a way that reflects actual costs. The pressure is on the Government to get it right. While it is welcome that the Government have made exemptions for some groups—in particular, people fleeing domestic violence—Lifeways’ concern about people with learning disabilities should not be overlooked. Sadly, there is a clear history in public policy of people with learning disabilities often being left behind or neglected in policy initiatives. It would be useful to hear from the Minister whether there are plans for other groups to be offered specific protections.
Many organisations expressed concern about the difference between supported accommodation and sheltered housing. It would be useful to hear how the Government see the difference between supported accommodation and sheltered housing for older people and the homeless.
As a London MP, I wanted to speak about the higher costs in London. I am grateful to London Councils for the information that they have provided. Its figures are based on applying LHA rates to the current total weekly costs eligible for housing benefit. It should be remembered that most providers cannot reduce rents in reaction to lower housing benefit entitlements set by Government due to the higher cost of provision, because of the nature of the needs of people in supported accommodation. If the Government plans go ahead as on paper, it is estimated that the London Borough of Ealing could have an annual shortfall of £528,000 a year. “Red” Kensington and Chelsea has forecast an annual loss of £440,000 a year. My borough of Southwark could have a shortfall of £167,000 a year. It would be useful if the Minister outlined how the Government will ensure that those additional costs are recognised and met. There is a lack of detail on the local top-up fund that forms part of the consultation. An indication of how the Government intend to operate that would be useful.
Conservative Back Benchers are keen to suggest that discretionary housing payments will always cover any housing shortfall from the Government. I hope that we do not hear a lot of that this morning. It is an insufficient answer and only a temporary solution, even when such payments are possible. For Greater London, there was a £23 million cut in DHP between 2013-14 and 2015-16. My borough regularly spends well over what the Government provide for DHP. It would be useful to know how the Minister intends to meet that need without relying on discretionary housing payments.
I have some questions on the operation of the new scheme and funding model. Is there an intention to pilot the new funding model rather than rolling it out nationally? The changes proposed are significant. The National Housing Federation and others are keen to work with the Government to ensure a successful pilot, not just for the individuals but in terms of value for money under any new model.
The Government have suggested an element of ring-fencing, but ring fences do not always work; people are looking for an iron-clad ring fence on this issue. How will the Government give certainty that any ring fence would last in the longer term? If housing associations and others are to be able to plan to meet the higher level of need for supported accommodation that we know we will see, the ring fence must be iron clad, not just for current demand but into the future. The Government need to be clearer about how funding will keep pace with the level of demand. How do they intend to measure and monitor the level of need and the level of funding required?
I conclude by repeating that this policy change is very poorly targeted. It was ill thought-through last year, it has been poorly developed since and the limbo period has caused considerable discomfort. There is still a very poor level of information available on how the Government plan to take the policy forward from 2019.
It is a pleasure to be able to speak under your chairmanship, Mr Howarth. I congratulate the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on securing this urgent and important debate.
I agree that it is important that we put supported and sheltered housing on a secure footing for the long term, but I am not comfortable with the idea that we are targeting a particular group. I have some experience in this area and we have not been doing as well as we could have; this is an opportunity to improve the service that we provide for vulnerable people in this housing situation, because it is absolutely right that people deserve to be supported to live independently and with dignity.
There are many organisations and people who support vulnerable people, including older people, people with learning disabilities and vulnerable young people. Examples of all those types of organisations exist in my constituency and I am familiar with them. They need the confidence that any changes that the Government make will ensure that they can continue to deliver those essential services for those who need them and that money ring-fenced for supported living is spent on supported living.
Certainly. I will come to the work that the YMCA is doing in my constituency to increase the amount of housing it provides for vulnerable young people, even in these supposedly uncertain times. There is a real opportunity to do something significant. There is work to be done, but the Government are heading in the right direction. What the people who provide the housing solutions need is confidence and a secure footing, and this is an opportunity to achieve that.
Is it not then important that we commend the Government for opening up a consultation? I have met many housing associations in my constituency, including Yarlington and Knightstone, which build across the south-west. Although one or two of those associations have projects on hold, they have certainly got some good ideas about how we could succeed in this area and make it better for the vulnerable people who need support and who we absolutely must support.
I welcome that intervention and completely agree. I delivered supported housing in the past, and there were decisions made, or done “to us”. The current situation is exactly as my hon. Friend says: an opportunity to get the people who understand the situation, the challenge and the solutions to work with the Government to deliver those things. We need confidence in three areas: that we will continue to deliver these essential services, that money awarded for supported living is spent on supported living, and that funding will keep up with demand—that is extremely important.
Long before I came to this place, I worked with people with severe learning disabilities and often with very elderly parents who were looking after adult children. The stress and pressure on the parents were enormous. The worry about where their adult children would end up when they could no longer look after them was significant. They had no confidence that the current arrangements would ever provide housing in the right place that their adult children needed to help them to live full and free lives. It is important that we use this opportunity to focus our attention and to address how we can provide the housing needed to support the whole family as they look to move their adult children into secure, independent housing that looks after them as whole people. We worked hard to do that. Local people put in their money to buy a property where we could house up to five people, close to their families, with the people in place who could support them to live there, but the barriers were so immense that we could not continue that service. The property is not lost because it is supporting homeless people, but we were unable to provide a secure arrangement for those people, where they felt they had a home for life.
Particularly in Cornwall, to which people gravitate because of the quality of living, many people with learning disabilities are living with older parents. We need to meet that housing demand now and in the very near future. We are not discussing the built environment, but it is important that the Government use every resource available to Departments to increase the supply of housing for people who have learning disabilities, to ensure that they are in the right place, with good transport links, close to home, where they can still be in close contact with their families and where they are part of the local community.
Devon and Cornwall Housing run foyers in my constituency, which are places where vulnerable 16 to 18-year-olds with quite horrendous backgrounds are supported. They are invited to live there. Alongside the housing—the roof over their heads—they receive support on growing up and the skills needed to become independent and to live lives that we all take for granted. The YMCA also works in my constituency. Years ago, I was on the board of YMCA Cornwall and sat on a panel that interviewed young people to ensure that the housing we provided was for them and would give them the tools that they needed to move on. They are only ever allowed to live in one of those properties for two years, so it is important that in that time they are supported to learn the skills and have the resources and abilities to go and set up homes of their own.
The challenges facing young people who qualify for such supported services are considerable. For years, both Devon and Cornwall Housing and the YMCA have been influential in helping young people to gain a firm footing in their lives. As I have said, there is good news, despite the uncertainty referred to by the hon. Member for Bermondsey and Old Southwark. Two weeks ago, I attended the annual general meeting of the YMCA. Bearing in mind that this is a rural, west Cornwall constituency where there are enormous housing challenges, the YMCA is being ambitious and is setting out to build 19 extra units in the constituency—it already has several—to support vulnerable young people. While the Government are focusing on what supported housing looks like and how we can respond appropriately and effectively to that important demand, will the Minister also pay attention to the barriers for young people in supported housing environments? A safe place to live is essential, but so is the right support to help them to move on from supported housing.
I would like to read a letter that I received from The Coach House, a foyer run by DCH in my constituency. It is right that we focus on supported housing, but we should also look at the barriers created by Government policy that hinder young people from getting the skills and tools they need. The letter says:
“Further to our conversation last week”—
I went along and sat in on one of the house meetings—
“about the young person I have that would like to do a university course at Cornwall College.”
This gentleman is 19 and has
“completed a level three music course at Penwith college. He completed it with triple distinctions. We went to Cornwall College to talk about him doing the foundation degree and was told that he would have to apply for student finance. I looked into how this would affect his benefits and was told that he couldn’t claim benefits if he had student finance. The rent at the Coach House is £230 per week student finance would not cover this. So he is now in the position that living in supported housing is holding him back. He still needs a lot of support so isn’t ready to move on. I think that if we could support him through the first year of his course he would be more than ready to move on. This would be a fantastic opportunity for this young person. He is more than capable of doing the course.
Since being told that he couldn’t do it because of funding his mental health has spiralled to the point that he hasn’t been getting up, washing, eating properly he is very depressed at the moment. I have just come back from the doctors with him and he has been referred to the mental health team”.
We could do more to help that young person to have a fantastic life—to get the skills and the degree he needs and to find the job satisfaction that we enjoy, but at the moment the system is hindering him from doing that further training. I would be interested to hear what work the Government can do across Departments to remove those unintended barriers.
In summary, can the Minister ensure that money given to local authorities will go in its entirety to supported living? Recently, we have heard about extra money for social care from an extra precept on our council tax. We are a year into that, but in my constituency I have struggled to be absolutely sure that the money has gone to social care. We would not want a repeat of that, so if the Government are to give money to local authorities to deliver locally based, locally driven solutions, we must be absolutely sure that it goes to where it is intended so that the people we are talking about receive the supported living they need and deserve.
What more can the Government do to increase the supply of supported housing for people with learning disabilities? How can we ensure that those homes are in the right places so that tenants can play a full part in local society and, equally importantly, access public transport? Finally, will the Minister address the difficulties faced by young people who want to gain skills but risk losing their support by doing so?
It is a pleasure to serve under your chairmanship, Mr Howarth. I am grateful to the hon. Member for Bermondsey and Old Southwark (Neil Coyle) for securing this debate. I intend to speak briefly, as this is not the first occasion since joining Parliament that I have spoken on the subject of supported accommodation, and I suspect it will not be the last. However, I have a few points to make.
When I last spoke on this issue back in April, I welcomed the delay in introducing the housing benefit cuts for those in supported accommodation, and I also welcomed the September announcement to further delay applying LHA rates to the supported accommodation sector until 2019-20. However, it is not enough merely to delay them; the UK Government must exempt supported housing tenants altogether from those devastating changes or find an alternative funding model. The change to housing benefit can undermine the ability of such tenants to pay their rent, thereby putting their home at risk and threatening their physical and mental wellbeing, as well as posing a genuine threat to housing associations’ financial stability. It could also end up costing us more money in the long term if those people move on to other forms of housing.
In previous debates, I have illustrated my concerns with practical examples from my constituency, and I will do so again. The Open Door Accommodation Project, based in Bathgate, which operates in my constituency, works with vulnerable young people. It has a number of supported flats throughout West Lothian and can accommodate up to 16 young people between the ages of 16 and 21. The flats are fully furnished, and most are shared accommodation. The aim is to prepare young people for their own tenancy. I was glad to hear that the shared accommodation rate will not apply to those residents.
When a young person joins the supported flat service, they are allocated a dedicated support worker who works with them to give personal and practical support and helps them to develop the self-confidence and skills they need to live independently. The young people being supported are already experiencing issues with the time it takes to receive benefit payments. That wait can have a huge impact on the likelihood of their sustaining their accommodation.
Another major concern is that there is no longer a seven-day run-on between accommodation, which means that young people have to move immediately when they sign up for a tenancy. That gives them no time to set up utilities or apply to the social welfare fund for the most basic of necessities. The uncertainty about the reduction of housing benefit further exacerbates those issues and, worryingly, might even put that vital supported accommodation at risk. How will such organisations plan for the future if they are faced with yet more funding challenges and uncertainty, which can only continue to deter investment in new schemes?
An area of particular concern for projects such as Open Door is the impact of the eligibility for the housing benefit single-room rate rising to from 25 to 35. That could make it much more difficult for young people to find suitable tenancies when they move on from the supported projects due to increased demand on single rooms and the difficulty in finding suitable flatmates in areas such as West Lothian and the Falkirk districts that make up my constituency—I do not believe that my area is unique in that respect. Those areas have a very different housing landscape from large cities such as Edinburgh or Glasgow, where shared living is much more common. An additional knock-on effect may be that a significant number of young people will move out of the more rural and suburban areas in search of shared accommodation, which may potentially have a negative impact on local economies and employers, as they may struggle to find young recruits.
I am also aware that the age increase to 35 could mean that a huge range of young and youngish people will be living in shared accommodation, which will lead to a new range of challenges. In particular, I worry about the vulnerability of teenagers who go through projects such as Open Door and then have to move on from supported projects to share accommodation with effectively middle-aged adults of 35.
There is much that concerns me about the UK Government’s proposals. I am, however, glad that there are plans to devolve funding to the Scottish Government for supported accommodation. In my opinion, that is a step in the right direction. It will help to ensure that supported accommodation is supported in a secure and sustainable way for the long term. I just hope that, as with the bedroom tax, Scotland will not have to mitigate the effects of yet another botched Tory attempt at savings that simply moves an increased cost burden on to Holyrood.
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on securing this debate.
It is fair to say that there was a significant policy vacuum earlier this year, which was causing much concern for those involved in the sector. Credit is due to the Government for coming forward with proposals to fill that void. I particularly commend the ministerial team at the Department for Work and Pensions for the speed with which it responded with its statement on 15 September. It should be acknowledged that, back in July, it was a brand new team. This is not a straightforward matter, and it moved quickly to address the sector’s worries.
I believe that the framework within which the Government are working up their proposals is sensible. They carried out an evidence review, and they have acknowledged that the proposals cannot be worked up just within the confines of the Department for Work and Pensions and the Department for Communities and Local Government. There is a need to work with other Departments and providers.
The Government are also right not to be rushing to put the new system in straight away. As they move into the consultation and detailed design stages, I have six specific concerns that I want them to address in their work with those involved in the sector day to day. First, there is a widespread concern that the 1% cut in rents to commence from next March will impact on the viability of schemes, in particular those of small providers, and will lead to either a reduction in much-needed services or the closure of schemes altogether. Another worry is that the cut will lead to housing associations drawing back into cheaper, general needs housing.
I acknowledge that the Welfare Reform and Work Act 2016 provides that social landlords can be exempted from the requirement to reduce rents if that would result in serious financial difficulty or jeopardise their financial viability. The feedback that I am receiving, however, is that so many providers will be adversely affected and the measure is casting such a shadow of uncertainty over the sector that it would be simpler to exempt all supported housing from the provision.
Secondly, there is concern among providers that the Government’s proposed model from 2019-20—in which core rent and service charges will be funded through housing benefit or universal credit, and costs above the local housing allowance rate will be paid from devolved funding—could lead to a postcode lottery. The National Housing Federation expressed that opinion, and Riverside has provided regional maps to illustrate it. Emmaus, which serves my constituency, has similar worries, as has the Salvation Army, which is concerned that the housing support entitlement of vulnerable men and women will be substantially reduced everywhere except certain parts of London and the south-east. I acknowledge that London has serious homelessness challenges, but so do other cities, towns and coastal communities such as the one that I represent. We need a one nation solution.
Thirdly, it is important that any funding mechanism has the ability to maximise the amount of finance that can be leveraged in from external sources, whether banks or pension funds. Bear in mind that new developments are invariably funded over long periods of between, say, 10 and 30 years, because lenders are looking for certainty that their investments are secure over the lending period. Rents eligible for housing benefit provide that comfort, because that is Government-backed income. The worry, however, is that the local discretionary top-up funding does not provide the secure, long-term solution that investors seek—it is too risky. As the NHF has pointed out, we need to ensure that the ring fence for funding is iron-clad into the long term.
My fourth point concerns mental health. Rethink Mental Illness has expressed serious concerns that the position of those with mental health challenges could be seriously compromised. Housing is the foundation stone for those facing mental health challenges to get their lives back on track, so we need to look very closely at the proposals as they affect that. Fifthly, the sector is very diverse. It has a number of different parts and, although we should have a core system, we need add-ons to address particular worries and concerns. Finally, as has been mentioned, this is complicated and not straight forward, so I ask the Government for a pilot project, which is necessary before the scheme is rolled out across the country.
In conclusion, the Government are to be commended for providing a framework within which a sustainable system of funding for supported housing can be delivered. Our challenge is to address the devil in the detail. This is very complicated and we need to work with the sector during the consultation period and beyond to deliver a system that fairly and properly provides for many vulnerable residents.
It is a pleasure to serve under your chairmanship, Mr Howarth, and it is always a pleasure to follow the hon. Member for Waveney (Peter Aldous), who made some good points and struck a better note than some of his colleagues have done.
Repeat debates on the same subject suggest either that someone is going for easy political point scoring or that the matter is one that the Government are continuing to get wrong. In this case, it is clearly the latter, and I congratulate the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on securing the debate.
In a debate last year, I stated that the Government’s housing strategy was a mess, unless we assumed that they wanted to dismantle the entire social housing concept. A year on, my sentiment remains the same. We only need to look at last week’s autumn statement to see that it allocated a further £0.25 billion to the right-to-buy pilot. Given the volume of right-to-buy properties that end up in the private rental market, that becomes a problem pushing up the housing benefit bill. The Government need to consider that, rather than attack supported housing, which provides lifeline services.
Supported housing provides refuges that can end years of hell, save people from domestic abuse, prevent rough sleeping, support people with mental health issues and allow older people to live independently in a safe environment. All those things combined can lead to an offset of savings within the NHS or can eliminate the need for people to be housed in more intensive and expensive residential homes, so helping to prevent bed blocking in hospitals.
My local Kilmarnock Women’s Aid organisation confirmed that it provides
“information, support and temporary refuge accommodation to women, children and young people experiencing domestic abuse.”
It believes that the
“impact of benefit sanctions and reforms are already having a disproportionate effect on women and lone parents. Universal Credit, which will be paid monthly to one householder, further increases the possibility of financial abuse.”
Therefore, it states:
“If refuge services are not exempted from Housing Benefit, a vital lifeline for women and children to find safety from domestic abuse could be lost.”
Against that backdrop, and as proof of a lack of joined-up government thinking, we have had a policy announcement confirming that the Government had no idea of its actual impact, which led to delays—which are welcome, but still only delays—consultation and now loose and woolly ideas for the future. The lack of greater detail from the Minister leaves a lot of uncertainty in the sector. There were some interventions on localism earlier, but the proposals do not offer confirmation that that will work; there is still insufficient clarity about what will happen.
In the here and now, we have had confirmation of the 1% rent decrease from 2017 in the supported housing sector, which will impose cuts on supported accommodation. The delay in the introduction of the local housing allowance cap until 2019-20 simply looks like a stay of execution, unless further clarity is provided.
Last year, an Inside Housing survey revealed the stark reality that 95% of providers might close their schemes, and the Government’s proposals have not changed much since then, apart from the possibility of some additional funding. The thing is, though, that we do not know how that funding will work. Will it make up the complete shortfall? I suggest that it will not, or else there would be no point in introducing a more convoluted system. The Government now seem to be hiding behind the discretionary housing payments excuse that they used for the bedroom tax. The Government have been defeated in the courts over the bedroom tax, so who knows what lies in the future for this?
As my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) said, it is a minor comfort that the relevant funding will be devolved to Scotland, although the Scottish Government are already spending £100 million to mitigate other Tory policies, and the Scottish Federation of Housing Associations has estimated a loss of funding of up to £14 million per annum. Will the Government take account of real need when looking at provision of top-up funding? Will the uplifts provided to the fund in future be at a flat rate? We need more clarity.
In a previous life, as a councillor, I was pleased to see the construction of a new development, Lilyhill Gardens, which provided supported accommodation to people with special needs, allowing them to live independently with the support of a telecare package. That project was truly transformational for the tenants, and won several awards. Local authorities and other providers would like to roll out similar models, but how can they do so when future funding is insecure? It is important that the Government provide clarity. In Scotland, we are trying to reshape the social housing model and provide a stock that is better suited to people’s living conditions and demographics, but it is really difficult to do that without clarity about funding. That could lead to bed-blocking and other things that will cost more money in the long run. Will the Minister reconsider this issue, apply an exemption to supported housing and abandon the Government’s penny wise but pound foolish strategy?
I certainly will, Mr Howarth. I am quite happy to stop at 10.30 am, as you indicated. I am quite happy to be the last to speak in this debate as well.
I congratulate the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on setting out his case so well and allowing us all to participate. It is good to speak in this debate. Like other hon. Members, I have spoken before about this issue, which affects some of the most vulnerable people in our society, and we are back here to do so again. We are back here for a purpose: there are quite clearly outstanding issues for us to address, and the matter is worthy of consideration and continued debate until we get it right. We are back here to get it right. I am pleased to see the Minister in her place; I hope that her cold or flu symptoms do not prove too much for her. I am sure that she will be able to respond to the issues that we bring to her attention.
I appreciate the extension until 2019-20 of the introduction of the local housing allowance cap, as that gives short-term relief to supported housing organisations and allows them to organise and work out whether they can continue to provide their valuable service not only to their residents but to the rest of the community. What those organisations do is important. It is estimated that at the end of 2015, there were some 651,000 supported accommodation units in Great Britain. That gives us an idea of the magnitude of the issue. The estimated annualised cost of the supported housing sector covered by housing benefit in Great Britain at the end of 2015 was £4.2 billion. Back home, I get requests about housing benefit almost every day, if not several times a day, and I am sure other Members do too.
It is claimed that supported housing provides a saving of around £940 per resident compared with the cost of housing them in other Government-provided facilities. On my maths—I hope my figures are correct—that is a saving of almost £612 million per year.
Yes, absolutely; my hon. Friend is right. That was a very wise decision. It was supported by all and was done for the very best reason: to help vulnerable people in society. I will focus on those people in the short time that I have.
We must surely consider that saving when looking at housing benefit and supported housing schemes over the long term. In March 2016, the Government confirmed that people living in supported and sheltered housing would be exempt from the LHA cap for a year to allow the Government to carry out a proper strategic review of how supported housing is funded. That is good news. Let us give credit where credit is due: that is a step in the right direction. I have been furnished with the results of the consultation carried out by members of the National Housing Federation, which represents housing associations. More than 200 organisations contributed their views to that consultation.
I could not agree more. That is clearly what we are all trying to achieve, and I hope the Minister will confirm that that is the Government’s target too.
The National Housing Federation says that the following three principles should underpin reforms to the funding of supported housing:
“No-one with support needs will become homeless or end up in unsuitable accommodation…The actual housing and support cost of delivering a quality service will be fully met, and will be flexible enough to meet changing levels of demand”—
things change, and we must be ready for that—and the
“taxpayer and those living in supported and sheltered housing will have evidence of the quality and value for money of the services being funded.”
That seems a solid foundation on which to build a supported housing policy, and I hope that the Minister will respond positively to that.
We must look at all those principles in the light of what the Government seek to do. The local housing allowance cap will apply to all tenants in supported and sheltered housing from April 2019. Housing costs will continue to be paid through the benefits system up to LHA level. There will be no shared accommodation rate; the one-bedroom LHA rate will apply to under-35s in supported housing. There will be local authority top-ups, and ring-fenced funds will be transferred from the Department for Work and Pensions and allocated by the Department for Communities and Local Government. The 1% rent cut will apply to supported and sheltered accommodation from April 2017.
There are still problems and many issues to be addressed. The hon. Member for Waveney (Peter Aldous) referred to people with mental health issues, and I want to focus on them, because those issues come up every day in my constituency. I do not believe that the Government’s aims allow them to follow through on the principles that are in place. Only last evening, before I got my flight to Heathrow to come to the House, I had a young man with mental health issues in my office who was finding it difficult to get housing benefit to allow him to live close to his family. I had only to talk to him to know that he was suffering from severe depression, anxiety and angst and really needed help and support to allow him to live his life somewhat independently. I speak out for him, to ensure that the Government’s proposals do not stop housing associations creating supported housing schemes, which are needed not simply for the elderly but for people of all ages and from all walks of life.
We have had 30 years of conflict in Northern Ireland. We often say that, but that does not lessen the statement. We have acute and complex issues in Northern Ireland; many people from all sides of the community and of all ages suffer from anxiety and depression and need help. It is important that supported housing schemes can be created and sustained. The Government must recognise that need and allow for it in their proposals.
Although the ring fence and the commitment not to use a shared accommodation rate for LHA for people under 35 are most welcome, we must ask how local authorities will prioritise the spending of their devolved funding. For example, will they prioritise people with social care needs over single homeless people? How will the Government ensure that local authorities get the right amount of money and that funding grows in line with need? How will we ensure that services that require relatively little additional funding, such as sheltered housing, are not caught up in complicated administration? The hon. Member for Waveney spoke about how complex that is both for us and for our constituents. How will we ensure that existing tenants are protected in the transition from one system to another? I know the Minister, and I know that her response will be positive. We want to hear positivity from her when she addresses those questions. I am aware that this issue is out to consultation, but it has surely been considered since the initial review in 2011.
I conclude with this comment. Reform is needed. The present system can be taken advantage of. We speak for the most vulnerable people—those with mental health issues, emotional issues and complex personal issues, who are in situations where they are taken advantage of, not supported—and we must ensure that they are not left alone. I implore the Government and the Minister to consider fully the responses of the bodies that deal every day with those vulnerable people, and ensure that we leave no one alone and vulnerable without the support that they need to live.
I add my congratulations to the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on securing the debate. This is a timely opportunity to re-examine the issues around the 2015 proposal to cap—in effect, cut—housing benefit for tenants in supported housing, given the Government’s temporary postponement of the plans, their further announcement in September that they were stepping back from the brink of implementation, and the publication of the report arising from their evidence review just over a week ago, which we are still digesting.
We have had insightful contributions from Members from both sides of the Chamber. One of the common themes is that supported housing is a crucial part of the social rented sector. It meets a variety of specialised needs in our communities—needs that would not easily be met in other ways. We heard that supported accommodation include homes for elderly people, for people fleeing domestic violence and for people overcoming addictions. For the majority, we are talking about homes for people with learning difficulties, substantial physical difficulties, serious mental health problems or other complex needs. In other words, they are people who would otherwise be unable to live independently—people who are frequently disadvantaged—some of whom are also very vulnerable.
We have heard stories from every part of the UK about the huge value of supported accommodation in our constituencies, the huge difference that it makes to the lives of those who need it and benefit from it, and the challenge and uncertainty that the Government’s proposals have caused not just to the people living in those homes but to those who provide those homes. My hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) highlighted the impact of the arbitrary age restrictions on disabled young people—those under 35 in that regard. The hon. Member for Waveney (Peter Aldous) expressed a range of concerns about the financial implications of the proposed changes for local authorities and supported housing providers. He also called for a pilot scheme for any changes that come in, which seems to be a sensible suggestion that I hope the Minister will take on board.
My hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown) got right to the heart of the matter when he challenged the Government’s approach to social housing in the wider context of austerity. He also made crucial points about women’s refuges and the role they play in helping people leaving violent home situations. The hon. Member for Strangford (Jim Shannon) focused his remarks on the impact on vulnerable tenants in Northern Ireland, and the hon. Member for South Down (Ms Ritchie) who, regrettably, was unable to make her own speech in the debate, emphasised the need for investment in the supply of supported accommodation to meet identified demands.
We should remind ourselves that, if we turned the clock back 40 years or so, many people with similar types of disabilities to those who live in supported housing today often did not live in the community. If they could not live with family or, as outlined by the hon. Member for St Ives (Derek Thomas), their family could no longer look after them, they were moved into large residential hospitals, often out in the countryside away from everyone. There was one in my constituency, and while I do not doubt that the residents had a high standard of professional nursing and medical care, most were not ill and did not need to be in hospital. Most of them were people with learning disabilities. It was an institutional model that cut patients off from wider society and robbed them of their independence. It also cost a fortune, even by the standards of the time. By contrast, there are now real homes in the area for disabled and learning-disabled people, and that is immeasurably better for everyone.
Supported accommodation has developed in the subsequent decades in a far more humane, appropriate and altogether better model of living for adults who would struggle to live independently without some degree of external support. However, the proposals we have seen from the Government in the past year to 18 months or so have put real question marks over the viability of that. The hon. Member for St Ives said that there is growing demand for supported accommodation, and I suspect that that is driven by changing demographics, with many members of the baby-boomer generation who were looking after adult disabled children at home no longer able to do so. Many young disabled adults, as we have heard, want to go to college and university, just like their peers. That has to be a good thing in the longer term, but it means that there is still a demand for supported accommodation. It has been a success, so let us not undermine that success with unnecessary cuts.
The Scottish Federation of Housing Associations represents dozens of housing associations in Scotland that provide supported accommodation of one sort or another. It estimates, based on projected turnover of tenancies, that nearly 6,000 new tenants could be affected by the proposed cap if it is introduced—obviously it is impossible to know exact numbers because the cap will affect future, not current, tenants.
The financial shortfall for those people—the gap between their housing benefit and their rent—is likely to add up to between £4.3 million and £5.6 million a year. That may sound like a small sum relative to the debates we were having in this place on the autumn statement last week, but for a tenant in supported housing in receipt of housing benefit the gap between their rent and housing benefit will on average be about £615 a year. That is nearly £12 a week, which would represent a substantial portion of income for, say, an adult over 25 on the new rate of employment support allowance. That would leave them with only about £60 a week to feed, clothe and keep themselves warm. A young person under 25 who has been assessed as fit for work would be left with only about £46 a week for their essential needs.
It is important to understand that many of the people we are talking about in supported accommodation may be on ESA for a lengthy period. Some may be in work or on jobseeker’s allowance, but for many the special needs that make them eligible for supported accommodation also make it difficult to find sustained full-time work. We should accept that some folk in supported accommodation will always need quite extensive support to have a decent quality of life.
We need to ask ourselves what happens when tenants in supported housing cannot pay their rent. The answer is simple. Whether people are in private sector, local authority or housing association-owned property, when rent arrears get out of hand or build up over time their tenancies are put in jeopardy. A rise in evictions and homelessness is not an outcome that anyone wants to see. It is also hugely costly to deal with the consequence of failed tenancies.
There is a real risk to social landlords’ willingness to invest in supported accommodation. If it becomes economically unviable to build and operate supported living, housing associations will not do it. That would be a disastrous outcome for individuals who could live independently in supported accommodation, and it would also leave local authorities with an almighty challenge of finding ways to meet the basic welfare and housing needs of some very vulnerable people.
In many of the case studies provided by the SFHA of current tenants with similar types of support needs to prospective future tenants, the only alternative safe forms of accommodation would be care homes or long-term hospitalisation. That would make us feel like we were turning the clock back. In my local area, finding care home places is extremely difficult, and I know that that is the case in many parts of the UK. Our hospitals cannot cope as it is with the problems of delayed discharges: having people in hospital who do not need to be there. That would become a hugely problematic issue if we lost the ability to place people in supported living.
The critical point is that either option—care homes or hospitals—is significantly more costly than a measly £12 a week for vulnerable people, which could make the difference between retaining and losing a tenancy. Money spent to keep people living in their community is money well spent and it is a false economy, and quite mean-spirited, to squeeze the already low incomes of economically deprived people, as the Government’s original policy proposed.
Before I conclude, what discussions has the Minister had with the Scottish Government about this issue? I welcome the plans to devolve funding in the area, but I hope she will confirm that it will continue at the current level. I am keen to know what engagement she has had with stakeholders in Scotland, most notably supported housing providers such as housing associations and local authorities but also the organisations that support tenants in those homes to live independently.
It is just wrong to target cuts on some of the poorest, most disadvantaged and, in some cases, very vulnerable people in our communities. It is also extremely short-sighted, economically counterproductive and socially retrograde. I appreciate that the Government are rethinking their approach. Sometimes the best thing is to accept that a previous ministerial team got it wrong and to recognise that the easiest, least bureaucratic and most cost-effective and compassionate way out is to back away from the cuts and exempt supported housing from the cap altogether.
I thank my hon. Friend the Member for Bermondsey and Old Southwark (Neil Coyle) for securing today’s debate on an important topic, and for giving such a balanced picture of the impact of Government policy. We have heard important contributions from hon. Members across the House, including the hon. Member for Waveney (Peter Aldous), who spoke of the shadow of uncertainty over the sector—something that I think everyone present will recognise—and described concern about the development of a postcode lottery. He called for a one-nation solution.
We heard contributions from my hon. Friend the Member for Coventry South (Mr Cunningham) and from the hon. Members for St Ives (Derek Thomas), for Taunton Deane (Rebecca Pow), for South Down (Ms Ritchie), for Linlithgow and East Falkirk (Martyn Day), for Kilmarnock and Loudoun (Alan Brown) and, of course, for Strangford (Jim Shannon). The hon. Member for Strangford spoke about the importance of providing appropriate accommodation for people with mental health issues. The hon. Member for Banff and Buchan (Dr Whiteford) did a good job of summing up the debate, and dealt particularly with the point that the special needs that make people eligible for supported housing can also make it harder for them to find employment. I think that all hon. Members would agree that money spent to keep people living in their constituencies is money well spent.
As has been said, the Government plan to cap housing benefit at local housing allowance levels for people living in supported housing schemes and to introduce a reduction of social rents in England of 1% a year. The housing benefit cap will force the closure of tens of thousands of supported homes for people most in need. The National Housing Federation predicted that 82,000 specialist homes would be at risk of closure if the cap and rent cut were implemented. Why the Government would pursue such destructive policies, which will drastically decrease the amount of supported housing that is available, is a question that still needs to be answered, especially when a number of national studies have demonstrated that supported housing services provide excellent value for the public purse. That is particularly true in relation to keeping the costs of health, care and criminal justice down—something that several hon. Members have mentioned.
Supported housing is one of the fundamental building blocks of independence. It includes a variety of schemes designed to provide both housing and support to help vulnerable people live as independently as possible in their community. Supported housing in the community is vital to the wellbeing of those people, and presents the best opportunity for them to take control of their lives. That is exactly why the Government must ensure that there is good local supported housing. Will the Minister explain what the Government are doing to ensure that the supported housing sector is properly funded to provide a vital service to vulnerable people?
Supported housing is a lifeline for people in vulnerable and sometimes dangerous situations. It is a way for vulnerable people to maintain their dignity and a degree of independence. Those are real people, with real problems, who need our support during these hard times. They are not statistics, or potential savings. They are domestic abuse survivors escaping abusive partners, older people in need of additional support, people with mental health issues or learning or physical disabilities, who need specialist care, or they are homeless people in desperate need of a safe place to sleep for the night. That is just a snapshot of the types of people who rely on supported housing. Anyone who leaves the Palace of Westminster late on a Monday night and walks past people sleeping in sleeping bags in doorways will be acutely aware of how desperate the situation is. Are the Government not ashamed to turn their back on the most vulnerable people in society?
Supported housing is a place of sanctuary and much-needed refuge. For example, the domestic violence charity Women’s Aid reported that 67% of its affiliated refuges in England would face closure if the local housing allowance cap were applied, while 87% of them would be forced to scale down their operations. With nowhere to go, women fleeing domestic violence would have even more perilous lives. What steps are the Government taking to ensure that there is good quality and properly funded supported housing for those who need the safety and security it offers? Good, well-funded and integrated supported housing makes economic sense. Evidence shows that it delivers average net savings to the public purse of about £940 per resident per year. Does the Minister agree that the cost benefit of supported housing is beneficial to the public purse, and that it should be properly funded?
I am pleased that the Government have finally listened to the Labour party and to housing and community groups, and have decided at least to delay the implementation of the LHA plan that was included in the previous autumn statement. However, the future of supported housing is still not secure. The Secretary of State’s written statement of 15 September promises at column 38WS to make “efficiency savings” to the supported housing sector in the same way as the rest of the social sector. The Government last week published a consultation, seeking views on their plans for a new housing costs funding model for supported housing. Will the Minister explain what exactly those efficiency savings will entail and how supported housing can be expected to make efficiency savings in a housing crisis? Ministers have promised a new, ring-fenced, fund; however, the similar, and once ring-fenced, Supporting People fund has been slashed by 45% since 2010. What guarantees can she give that a new fund will not also be cut?
The uncertainty is having an immediate impact; it has left tens of thousands of the most vulnerable people in limbo. Services coming up for re-tender are at risk of closure, irrespective of the outcome of the consultation. The charity Mencap said that the proposed cap had caused 80% of plans for new supported housing to be put on hold, and 40% of existing schemes to be threatened with closure. Does the Minister agree that the decision on the cap was merely delayed, causing unnecessary anxiety for those concerned?
Riverside has looked at the possible geographical difficulties of the new top-up scheme. I share its concerns about where the line is drawn between housing costs met by DWP through a national benefits system, and additional housing support costs met through locally administered funding pots. With LHA rates more modest in many lower-value areas of the country, significant top-up would be required just to meet core rent and basic accommodation-related service charges. For example, the LHA level for a one-bedroom Riverside home in Hull is £69.73, as opposed to £260.64 in Westminster—a difference of £190.91. In many lower value areas, significant top-up would be required. The local top-up funding allocations will need to perform a very different role in different parts of the country. In my area of the north-west, along with the rest of the north and the midlands, the top-up funding will mainly be meeting core rents and services, compensating for the fact that LHA rates are so much lower. In other areas, top-up funding can support new services.
The Government have committed to continue supporting “specialised supported housing”, but will still impose savings on general supported housing. Can the Minister explain what constitutes specialised supported housing as opposed to just supported housing? Homeless Link has said that the definition of “specialist” covers very few supported projects and would protect very few homelessness services. I would argue that any housing that provides expert support to vulnerable people is specialised and therefore should be protected from the LHA cap. Anyone in the sector will say that shelters and refuges are at capacity. It is already a struggle to provide the support needed to help people live independently. Vulnerable people are being turned away. That is happening now, and I dread to think what will happen when the Government finally announce the outcome of their consultation.
Supported housing is oversubscribed and more units are desperately needed. The Government need to do much more to secure the long-term future of supported housing. People who have fallen on hard times should not bear the brunt of Tory economic mismanagement. They deserve dignity and support. I urge the Government to rethink their position urgently, to listen to the deep concerns expressed by the supported housing sector and to ensure that all supported housing is fully exempt from the cuts.
It is a pleasure to serve under your chairmanship, Mr Howarth. I add my congratulations to those offered to the hon. Member for Bermondsey and Old Southwark (Neil Coyle) on securing this important debate. Prior to his election, the hon. Gentleman worked in the field of disability and he continues to be an important campaigner for disabled people in his role as a Member of Parliament. He will know from his experience—we have heard a little of it this morning—how broad the supported housing sector is. He therefore has an excellent insight into the challenges of finding a proposal that will work across the whole sector.
As we have heard, supported housing is vital for many vulnerable groups. Whether additional support is needed for a short time to help someone recover from difficulties or setbacks in life, or whether it represents a longer-term arrangement, the valuable role that such accommodation plays is clear. Last week we published our evidence review of the supported housing sector, which we commissioned jointly with the Department for Communities and Local Government. The review has given us an important indication of the scale, scope and, indeed, cost of the sector across Great Britain. It estimates that there are about 651,500 supported housing units, predominantly provided by housing associations, local authorities and charities. The majority of the units—about 71%—are for older people, and the remainder for those of working age. It is estimated that at the end of 2015, just over £4 billion of housing benefit was being spent annually on the sector in Great Britain. That amounts to 17% of the total departmental expenditure on housing support. The review also provides an indicative estimate of just over £2 billion per annum for additional funding from other sources in addition to housing benefit in Great Britain. That was largely made up of local authority spending.
The focus of debate today is specifically the effect of the Government’s proposals on supported housing. The Government are committed not only to protecting but to boosting the supply of such housing, and ensuring that it provides value for money and works for those who use it, as well as those who pay for it. As Members will be aware, we have announced that a new funding model will be introduced for supported housing when the local housing allowance rates are extended to the social rented sector from April 2019. In future, housing costs up to the level of the relevant LHA rate will be met through either housing benefit or universal credit. Funding for the additional costs of providing supported housing in excess of that amount will be met through local funding, which is to be devolved to local authorities in England and to the devolved Administrations.
The hon. Gentleman must not fret; I will come to that later. Many comments were made by hon. Members and I will try to respond to most of them, but I am conscious that time may not allow for all. I will allow the hon. Gentleman time to come in at the end as well.
As hon. Members have heard, the Department for Communities and Local Government and my Department last week jointly launched a consultation on the detail and implementation of the new sustainable funding model. I welcome this debate as an important opportunity to draw Members’ attention to that. I will turn to the specific points raised by hon. Members in order. I hope to get to every point, but if time does not permit, I will write to hon. Members to clarify a few points.
My hon. Friend the Member for Taunton Deane (Rebecca Pow) and the hon. Members for South Down (Ms Ritchie) and for Bermondsey and Old Southwark mentioned local funding and why it is important that local authorities and devolved Administrations are going to be involved. I absolutely believe that local authorities are best placed to make decisions about how to support vulnerable people in their own areas. We heard about location from my hon. Friend the Member for Waveney (Peter Aldous) and the hon. Member for South Down, and they are right that it is important. However, it is also about understanding local need and being able to reflect that in the most appropriate type of provision.
The hon. Member for Bermondsey and Old Southwark mentioned disabled people, and he was right to do so. As he will know, disability spending will be higher every year to 2020 than it was in 2010. He also spoke of the types of people living in supported accommodation and, like me, he celebrates the numbers of young disabled people who are both living longer and wishing, quite understandably, to live more independently. He is right to point out that that is also a challenge, but it is one that we are determined to rise to.
Likewise, we have a growing elderly population. At the start of the debate, the hon. Gentleman outlined some percentages of individuals living in supported accommodation and what their particular needs might be. I emphasise that people do not necessarily have single needs. We have an ageing population, and as people grow older, their needs tend to become more acute and they tend to have more of them. It is important that we have a system that enables those with really quite intense needs to live independently for as long as they can and, indeed, for as long as they wish to.
Under the Care Act 2014, local authorities have a general duty to promote an individual’s wellbeing when carrying out their care and support functions. Through the consultation, we will be seeking views on whether further protections may be required to ensure that all relevant client groups can gain appropriate access to funding, including those without existing statutory duties.
I can reassure the hon. Gentleman that Departments across Government have worked closely together on the proposals and will continue to do so. They include the Department for Work and Pensions, the Department for Communities and Local Government, the Department of Health, the Ministry of Justice, the Department for Education and the Home Office. We are also working with colleagues in the devolved Administrations.
We have to make it clear that this is not about targeting individuals but about ensuring that we have a system in which the quality of services is central and there is a clear focus on outcomes for individuals. Under the current system, effective oversight of quality and value for money is not strong enough. Through the consultation, we will consider new approaches to transparency and oversight. Our aim should be consistent standards for everyone living in supported housing, alongside a clear demonstration to the taxpayer of value for money.
We want to ensure simplicity and a streamlined process, in line with the principles of universal credit, which a number of hon. Members have mentioned. We have a solid foundation of universal credit delivery in every Jobcentre Plus, and people who are moved from housing benefit to universal credit by the Department after April 2019, and whose overall benefit entitlement will be lower, will be protected in cash terms under transitional arrangements.
As I have said, we recognise the diversity of the supported housing sector, in terms of both the groups of people who live in such provision and the range of support needs that they may have. Officials and Ministers from across the DWP and DCLG have held extensive meetings with representatives from across the sector to understand the nuances of what a new model needs to deliver. They have asked specifically about additions in the consultation document, including what potential role additional statutory provisions or duties for local authorities in England could play, particularly in terms of protecting provision for specific vulnerable groups. The task and finish groups we are setting up to consider a number of detailed aspects of the model are being carefully put together to ensure that the breadth of the sector is represented. I think three hon. Members asked whether the Government would commit to piloting the new funding model. There will be shadow-year arrangements in place on the detail and allocation of funding, to allow for the full transition to the new model from April 2018.
During the last two financial years, the majority of local authorities spent less than 100% of their allocation of discretionary housing payment from central Government. The hon. Member for Bermondsey and Old Southwark has urged me not to dwell on DHP—this will be one of my few references to it—but we provided local authorities with £560 million in DHP funding in the last Parliament, and we have committed to a further £870 million over the next five years. The amount of top-up funding will be set on the basis of current projections for future need. Budgets for years beyond those already set will be determined in the usual way: at future spending reviews. I emphasise again that we want to work with the sector, through the consultation, to consider the wider strategic goals, such as responding to expected future growth in demand.
We see an opportunity here to do things differently, and to create a new strategic approach to commissioning supported housing. My hon. Friend the Member for St Ives (Derek Thomas) made a number of important points about doing better. He also raised the issue of the YMCA. I have been pleased to visit a number of projects since coming into this role in July, and I have long been a supporter of the work of the YMCA and have welcomed the input it has made to this process so far. I also visited a foyer in St Ives, and I absolutely agree with my hon. Friend on the importance, particularly for young people in the supported housing sector, of having move-on accommodation and increasing their level of education and training so that they have a better opportunity of employment.
The hon. Member for Linlithgow and East Falkirk (Martyn Day) spoke of Open Door in his constituency and its supported flat service. He made the valid point that there are very different accommodation landscapes across Scotland. We recognise that challenge, which is one of the reasons why we are devolving this responsibility to local authorities and to the Scottish Parliament.
The hon. Member for Banff and Buchan (Dr Whiteford) asked what contact I had had with Scottish members of the sector. In one of my roundtable meetings, I was pleased to have representatives from Scottish housing associations who came down to London to put their point of view across. I pay particular tribute to Scottish Women’s Aid, along with Women’s Aid nationally, which has been really constructive and engaged throughout this process, both with myself and with my noble Friend Lord Freud, who is the Minister for Welfare Reform. My hon. Friend the Member for St Ives mentioned a specific case in his constituency about students. I will be happy to meet him later to discuss that.
As we know, the Scottish and Welsh Governments have devolved responsibility for housing policy and already determine their own priorities. We anticipate that the Treasury will advise those Governments of their allocations at around the same time as the local authorities in England, which we expect will be in autumn 2017.
I am sorry, but I really have no time left and I would like to leave a couple of minutes for the hon. Member for Bermondsey and Old Southwark to wind up—it will probably be 90 seconds now.
There is a specific point in the consultation about working with the sector to design an alternative model for refuges, which was raised by the hon. Member for Kilmarnock and Loudoun (Alan Brown), and the hon. Member for Strangford (Jim Shannon) said we should get that right. He is absolutely correct to say so. That is why we are not rushing this, and it is why I am pleased to be here today. My first debate as a Minister was on supported housing and that is the issue again today. Getting this right and ensuring that the consultation is as full and thorough as possible is an important part of my role, so that when we move forward with the new funding model, it works for those groups who hon. Members have rightly identified.
I thank all hon. Members for contributing to the debate and I also thank the Minister and the Front-Bench spokespeople. Members from St Ives to Strangford have emphasised the need to get this right. The context is that the Government made an ill-thought-through announcement last year. They got it wrong, and while there have been some welcome comments from the Minister, I note that there was no apology for the damage done to the sector by that uncertainty and instability over the last year. It is a sector that saves the taxpayer about £3.5 billion through things such as preventing bed-blocking, as mentioned by the hon. Member for Linlithgow and East Falkirk (Martyn Day).
I hope the Minister will use the consultation and the next few months to genuinely develop and improve these plans, to ensure that the Government get the policy right for the people, organisations and councils affected. I am sure there will be further opportunities to examine the issue in more detail, including through the joint inquiry by the Work and Pensions Committee and the Communities and Local Government Committee in the new year. I hope all Members will contribute more fully over time.
Question put and agreed to.
That this House has considered the effect of Government proposals on supported housing.