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Supported Housing Funding

Volume 629: debated on Tuesday 10 October 2017

I beg to move,

That this House has considered future funding of supported housing.

It is a pleasure to serve under your chairmanship, Mr Streeter. I am pleased to have secured this debate, which comes at an appropriate time, ahead of the Government’s publication of their response to the consultation that finished in February. I am aware that many colleagues want to take part in this debate. I shall do my best to accommodate them by taking interventions, but the pressure of time may mean that I have to disappoint some people, for which I apologise. Their presence, even if they do not get an opportunity to speak, says it all and sends out the right message. I confirm that I will support any application to the Backbench Business Committee for a longer debate.

[Sir Edward Leigh in the Chair]

This debate provides an opportunity to re-emphasise the vital importance of putting funding for the sector on a sustainable long-term footing and of the Minister providing a progress report on how the Government are getting on in formulating their plans. That is essential if we are not to let down a vulnerable group of people, whether they are elderly, young, physically disabled, fleeing domestic violence or facing mental health challenges. It is appropriate that this debate is taking place on World Mental Health Day. Housing is essential to securing parity of esteem with physical health treatment.

The case for supported housing is compelling. Demand is rising for care and support as a result of an ageing population and increased levels of mental illness and learning disabilities. Supported housing enables older people to retain their independence, allows young people to live securely and get their lives back on track and ensures that victims of domestic violence can find emergency refuge and stabilise their lives. It helps homeless people with complex and multiple needs make the transition from living on the street to having a settled home and providing education and training to prepare them for work. It ensures that those with mental health needs can stabilise their lives and live more independently. Supported housing assists ex-servicemen and women who are experiencing difficulties in readjusting to civilian life. It ensures that people with learning disabilities can maximise their independence and exercise choice and control over their lives. Investment in supported housing provides an alternative to more expensive residential care settings such as care and nursing homes. In that respect, it provides good value for money.

I congratulate the hon. Gentleman on securing this debate. In April, the Communities and Local Government Committee and the Work and Pensions Committee published the report of our joint inquiry into the future of supported housing. It detailed the evidence—some of which he has mentioned—of the value of supported housing to those who live in it. It also sets out the devastating impact that uncertainty about Government funding for supported housing is having on the sector. Subsequent research has confirmed that 85% of new supported housing schemes have been put on hold. We are now more than 18 months on from the Government’s announcement that they would review funding arrangements for supported housing, but there is still no clarity or certainty. Does he join me—

Order. This is only a half-hour debate. Speeches may be made only by permission of the mover and the Minister, and interventions should be as short as possible.

The hon. Member for Dulwich and West Norwood (Helen Hayes) refers to the joint Select Committee report, which I will address in some length. It is part of the valuable work that Parliament has done.

I will be brief. I strongly support my hon. Friend’s leadership in this area. Does he agree that many faith-based organisations such as the YMCA, the Salvation Army and Emmaus need to know from the Minister that the system will be flexible enough to accommodate not just the need for shelter but the personal support that those organisations provide?

The three charities that my hon. Friend mentions have made that point to me. It is well made.

The hon. Gentleman is being generous in giving way. He made the point that if supported housing becomes unsustainable—as many people say it already is—the cost of people going into residential care will be exponentially higher?

The hon. Gentleman has secured this debate at a timely moment. Does he agree that the lack of clarity from the Government is leading to a lack of investment in supported housing? The longer that goes on, the bigger the crisis will be in the future.

There is a need for the Government to come forward with their proposals and plans. My point is that Government, Parliament and the sector, working together, all have a role in addressing this problem.

Let me move on. The vital role that supported housing plays is recognised by all, as is the need for a sustainable long-term solution, not a short-term sticking plaster. This is not a straightforward challenge; it is vital for Government, Parliament and all those involved in the sector to work together to put in place the right funding framework. There are encouraging signs that that is happening, but there is still a great deal of work to do.

The Government made the correct first move by carrying out the first evidence review for 20 years. Its findings were published on 21 November last year—the same day the Government launched their consultation on their preliminary proposals, setting up four task and finish groups to address specific challenges. The preliminary proposals were announced on 15 September 2016 by my right hon. Friend the Member for Ashford (Damian Green), the then Secretary of State for Work and Pensions. In brief, they provide for people living in supported accommodation to have their core rent and service charges funded through housing benefit or universal credit up to the local housing allowance rate, and for costs above that rate to be distributed by local authorities from ring-fenced top-up funding provided by the Government.

The hon. Gentleman mentions the top-up on the local supported housing allowance. In Hull, that would be only £69.73—well below the needs of the organisations that the hon. Member for Hertford and Stortford (Mr Prisk) mentioned, such as Emmaus and the Salvation Army. My fear is that the money coming from the local authority will not be ring-fenced, sustained or available beyond a certain period. Those organisations are seriously at risk of falling dramatically below the level of funding that they need to keep going and stay open.

I hope I can answer the hon. Lady’s question straight away. Two concerns have been expressed to me about these proposals. First, is a one-size-fits-all LHA rate an appropriate starting point for a new funding mechanism? Secondly, providers are concerned that discretionary local top-ups do not provide the long-term stability needed for investment in new facilities.

I agree with the hon. Gentleman. Is it his understanding, as it is mine, that there is no correlation between LHA rates and the cost of providing supported housing across the country?

The right hon. Gentleman is spot on. There is a real worry that if we do not get this right, we will be creating a postcode lottery. The Communities and Local Government Committee and the Work and Pensions Committee published a unanimous joint report on 1 May in which they made three recommendations to complement the Government’s proposals. For the sake of timeliness, I will not outline them. I sense from the hon. Member for Sheffield South East (Mr Betts), who chairs the Communities and Local Government Committee, that we know the answer.

The work by Government and by Parliament’s Select Committees provides the foundation stone for a new long-term funding framework in which housing associations, charities and social enterprises can invest and take up the significant amount of funding that the Government have made available over the past five years.

Is the hon. Gentleman aware that the funding that was incorporated in the revenue support grant in 2011—taken away from a specific grant—has decreased by 53% in just one part of my constituency?

I was not aware of that, but it illustrates the concern that if we do not get this right, we could have a postcode lottery.

I thank the hon. Gentleman for his comments about the joint report by the two Select Committees, which were chaired by my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham). Since then, five housing associations, in a meeting chaired by Lord Richard Best, have come forward with a proposal for small regional variations in a specific grant with small top-ups that would meet the Select Committees’ proposals and cost the Government no more money. Should not the Government carefully consider that?

The hon. Gentleman is stealing my thunder, because I will come to that point in my recommendations, but I accept that he has done the hard graft and I am just a mouthpiece.

In the month before this debate, I received many representations that confirmed not only a willingness to engage with Government and Parliament but a worry that the proposals in their current form do not achieve their objective. I am happy to share all those representations with the Minister. The National Housing Federation, which represents English housing associations, has expressed concerns. The Chartered Institute of Housing has emphasised that the stakes are very high and that if we get this wrong, the implications for the public purse—not to mention life chances—are frightening.

From my experience of the supported housing provided for constituents with autism and learning difficulties, I know that the LHA rent cap will mean that they simply will not be able to afford the support that they get in their current setting. They will end up in institutions or hospitals, which will actually cost the taxpayer far more money.

The hon. Gentleman makes a good point.

One Housing, a major provider of affordable housing in London and the south-east, is extremely concerned about the plan for a cap on the housing benefit to the level of the local housing allowance. It believes that it will have a dramatic impact on older people’s housing with care schemes and could reduce new supply. The Home Group, which is active in the north-east, Cornwall and East Anglia, including in Lowestoft in my constituency, is concerned that reliance on LHA rates could lead to a postcode lottery. It has put on hold the development of 1,842 units across the country while it awaits clarification on the proposed system.

In my own constituency, one housing provider—Riverside—has informed me that all but one of its residents will be affected by these proposals, with the average resident’s rent at one project more than £100 per week above the proposed cap. Does the hon. Gentleman agree that the proposed arbitrary cap will cause undue stress and anxiety to residents who may be forced to rely on the top-up funds?

I thank the hon. Member for that intervention. It is quite clear from the feedback from organisations around the country such as Riverside—I have met Riverside staff—that there are serious problems.

The report that my hon. Friend referred to, which the hon. Member for Dulwich and West Norwood (Helen Hayes) and I co-chaired, made recommendations that would deal with two or three of the comments that have been made by Members so far, particularly by having a new supported housing allowance with four relatively modestly differentiated regional bands, which would deal with the point about not needing local authority top-ups. Does he agree that, if the Government were to go ahead and accept those recommendations, it is also important that they hold to account housing associations and others to ensure that the provision is of a consistent quality throughout the country?

I agree with that point and I also thank my hon. Friend, because I am aware that he played a key role in the report from the joint Select Committees.

The Associated Retired Community Operators, which is the main trade body representing the retirement community sector, has also expressed concerns.

Will the hon. Gentleman also acknowledge the concerns of Community Housing Cymru, on behalf of housing associations in Wales, about the level of funding to be devolved under the new arrangements and the length of time that it is taking for the Green Paper to be published?

I thank the hon. Gentleman for that intervention. A lot of my emphasis has been on what is happening in England, but it is important that we remember the requirements of the devolved national Administrations; his point is well made in that respect.

Leonard Cheshire Disability has also expressed a concern to me. Rethink Mental Illness and Mencap have similar concerns. They highlight the important role played by supported housing in helping people affected by mental illness to recover, move on and live independently. They stress the need to think outside departmental silos and to engage with NHS England. It is worth bearing it in mind that a 30-day delayed discharge from a secure ward costs £16,890 and the same delay from an acute setting equates to £13,170. That compares with the cost of the most expensive forms of mental health supported housing, with added support costs, of around £2,000 per month.

One of the providers in my constituency says that the shortfall in local health authority funding will be around £3.3 million, leaving the most vulnerable people without a roof over their heads. Does the hon. Gentleman agree that that is an intolerable situation for people to be in?

I thank the hon. Gentleman for that intervention. It is quite clear from the research I have done that there are significant funding gaps. In fact, the YMCA, which is the largest charitable provider of supported housing for younger people, estimates that under the current arrangements there will be only 65% of the total funding that currently goes towards providing its 10,000 beds, which would leave the YMCA with an estimated £27 million funding gap.

Supported housing also has a vital role to play in ending rough sleeping, as St Mungo’s has highlighted in its “Save Hostels Rebuild Lives” report, which was also published last month. The Salvation Army has expressed concern that its 60 Lighthouses across the UK could be put at risk and it is calling on the Government to delay the introduction of any new funding system until 2022.

Bolton at Home supports 600 households, as well as providing 2,500 sheltered places. It says that the extra money it receives is used to provide support, assistance and advice to many elderly people who have a lot to deal with, such as mental health issues. In the long term, providing such housing saves loads of money as well. So, when money is being considered, Bolton at Home would like those things to be taken into account, too.

I thank the hon. Member for that intervention; she is illustrating that this is a nationwide problem.

I am conscious that my colleague to my right, my hon. Friend the Member for Rochford and Southend East (James Duddridge), wishes to intervene. I will allow him to intervene and then I will give way again to the hon. Gentleman.

I thank my hon. Friend for giving way. I wanted to make a narrow point about Estuary Housing Association, as my constituency is affected by it. However, is he aware that, since he started his speech and said that half an hour for this debate was inadequate, about 60 or 70 Members have arrived, chairs have had to be brought in at the back and here on the Conservative Benches I am joined by the hon. Member for Westmorland and Lonsdale (Tim Farron), the leader of the Liberal Democrats, or Labour as we now call them—[Interruption.]

Clearly, this issue has brought us all together. Can we say in the strongest possible terms to the Minister that we really need to sort this out, and if it is not sorted out we need to come back to the House and go into a lot more detail in another debate, in which I would like to make a speech in favour of Estuary Housing Association?

Order. I have to say that the hon. Member has now been speaking for more than 15 minutes, so we now have less than 15 minutes left. These Adjournment debates are supposed to be a dialogue between the mover and the Minister, and not just a monologue interrupted by other Back Benchers. I know that the hon. Member will leave plenty of time for the Minister, because it is important that he replies on behalf of the Government.

I am grateful, Sir Edward, for that timely advice. I will now move on to my three suggestions for ways forward.

My first proposal is that the Government should give full and serious consideration to adopting the recommendations made by the Communities and Local Government and the Work and Pensions joint Select Committee; it has made its case well. Under the auspices of Lord Best, Housing and Care 21, Riverside, the Home Group and Hanover Housing have analysed data from approximately 43,000 supported housing and older people’s tenancies across the UK, and concluded that a supported housing allowance proposal represents a viable and workable approach. Although I recognise that the Government have to study that analysis closely, this proposal could be a sensible way forward.

Secondly, it is important that the Government examine very closely the impact of universal credit on the supported housing sector, particularly as the rollout is due to be ramped up in the next few weeks. Universal credit in its current form is in many respects incompatible with supported housing. The local housing allowance rate was designed for the private rental sector and bears no relation to costs in the supported housing sector. It also introduces levels of variation in funding through the benefits system across the country, which are greater than the variation in costs of delivering supported housing. This could leave parts of the country particularly exposed and it could skew development towards areas with higher funding rather than highest need.

Thirdly, there is a need for the Government to provide a revised timetable for working up the new funding framework with providers, road-testing it, carrying out an impact assessment and then introducing it. The general election has thrown the previous timetable somewhat off course. I anticipate that the Minister will advise us as to when the Government will respond to the consultation that closed in February, and whether they are still intending to introduce the new system on 1 April 2019. An early statement is required to address the concerns I have outlined, which have been echoed all across the Chamber, and to set out a clear direction of travel. It would be helpful to receive some indication as to whether a pilot or a shadow year—as the Under-Secretary of State for the Cabinet Office, my hon. Friend the Member for Romsey and Southampton North (Caroline Nokes), suggested when she was Under-Secretary of State for Work and Pensions—might also be considered.

In conclusion, Sir Edward, I am grateful to you for bearing with me. It is important that we get this matter right, as the lives of many vulnerable members of society depend on it. I acknowledge that this is not a straightforward task, but I sense that, by working together, a partnership of Government, Parliament and the supported housing sector can put in place a long-lasting framework that will provide dignity, peace of mind and hope to residents. They deserve no less.

I am grateful, Sir Edward, for the opportunity to speak. It is a pleasure to serve under your chairmanship.

I will begin my response to the debate by thanking my hon. Friend the Member for Waveney (Peter Aldous) for securing this important debate and for granting me the opportunity to outline the significance that the Government attach to supported housing. I know that he has been following the issue extremely closely and has been a great advocate for the sector and the people it supports. The importance of supported housing to right hon. and hon. Members is demonstrated by the number of them here in the Chamber today.

Supported housing plays an invaluable role in our society, helping some of our country’s most vulnerable people to live as independently as possible. Supported housing serves as an important lifeline for vulnerable older people, individuals with learning disabilities and physical impairments, those at risk of domestic abuse and many other vulnerable people. It is also an investment—a point made by my hon. Friend the Member for Waveney—that brings savings to other parts of the public sector, such as health and social care. It is essential, therefore, that we introduce the funding model for supported housing and make sure that it is on a sustainable footing, ensuring that it works for providers, commissioners and vulnerable tenants, as well as for the taxpayer.

I will make some more progress and then, bearing in mind that I do not have long to respond, I will see how many interventions I can take.

We recognise the value of local strategic planning, partnership working, commissioning and oversight, and we are keen to encourage local government, providers of supported housing and the wider public sector to continue to develop a joined-up, strategic, holistic approach with a greater local focus very much on outcomes, oversight and value for money.

As my hon. Friend the Member for Waveney knows, our consultation on supported housing concluded earlier this year. We welcomed all the responses, of which there was a significant number—592—and we have been careful in taking stock of the views from the sector, local government, other stakeholders and Members of this House. We also welcomed the joint Committee inquiry, and its subsequent report, into the future funding of supported housing, and we have been considering its recommendations. I thank Members who served on that Committee for their work and their input into the process.

Let me assure the House that we have been taking all of this thoughtful and reflective input into account as we continue to develop our plans. This matter is a priority for the Government, and we will announce the next steps shortly—later this autumn. I believe that when those proposals are introduced, they will show that we have listened and have understood the important issues at hand and the important situation. What is at stake is helping and supporting some of the most vulnerable people in our society.

I am extremely grateful to the Minister for giving way. I want to place on record how first-rate the opening speech, by the hon. Member for Waveney (Peter Aldous), was. The Minister mentioned sustainable funding. If such funding is set at a very low level, does he not accept what the YMCA, whose supported housing I have visited in my constituency, believes? That organisation believes that reform could lead to a two-thirds reduction in its funding, and that, although it might be secure, it would be completely unsustainable and would lead to destitution for the people who need this kind of supported living the most.

I entirely agree that we need to ensure that this is a sustainable source of funding, on which the YMCA and many other organisations that provide support and assistance to the most vulnerable in our society can rely to deliver their services. My hon. Friend the Member for Waveney mentioned short-term accommodation, and I will address that very point in a moment.

We want the design of the reformed funding model to be flexible. We also want it to be responsive enough to meet the various demands placed on it by a diverse sector and client base. We have therefore been working closely across Government to understand and consider the needs of individuals who require long-term supported accommodation, such as people with learning disabilities, physical and sensory disabilities and mental health problems, and disabled older people. That is why we want to commit to supporting the most vulnerable in our society with £400 million of capital funding to deliver new specialist affordable homes, particularly for the elderly and people with learning disabilities.

I will take just two more interventions so that I can then respond to the comments made by my hon. Friend the Member for Waveney.

I am grateful to the Minister. I have counted 53 Members in the Chamber today, not including the Minister and his Parliamentary Private Secretary. That number is unprecedented, in my experience, for a half-hour debate. The Minister talks about the “we” in Government. Will he press that fact, and the concern here in this room, to the Secretary of State for Work and Pensions and the Chancellor? Will he also press the point that the hon. Member for Waveney (Peter Aldous) made, that there is a real job for Parliament, the sector and the Government to find—together—a good solution for the long term? Will he now get the Government to step up to do just that?

I do not disagree with the right hon. Gentleman’s sentiment, but I can assure him that we are working across government, across the Departments that he mentions, because we want a sustainable funding solution to support the extremely vulnerable groups we all want to see supported in our society.

I am grateful to the Minister for giving way, and I congratulate my hon. Friend the Member for Waveney on securing the debate and on his excellent opening remarks. Will the Minister confirm that he has read the report from Riverside, which was mentioned earlier, which builds on the Select Committees’ recommendations about a banded scheme and seems to solve the problem without it costing the Government extra money?

Indeed I have, and I have met Riverside and a whole host of providers in the sector, including last week at the Conservative party conference, where I was involved in a roundtable event held by Reform. Although there were not as many seats around the table as we have here, there was a waiting list, which demonstrates the importance of the issue and of the Government’s getting it right.

I would now like to pick up the points that my hon. Friend the Member for Waveney made. Both he and other Members mentioned the work done by Lord Best and my hon. Friend the Member for Gloucester (Richard Graham), and I have had sight of their proposal, which is about developing a bespoke supported housing allowance. I am most grateful for their recommendations and for the suggestion about maintaining funding from the welfare system and testing and developing a banding system to provide cost controls that reflect the costs of provision in a particular area and for a particular type of supported housing. That is something we are considering very carefully.

I thank my hon. Friend for his question from a sedentary position. In relation to our response to the consultation, the issue of timing is not lost on us and we expect to come forward with further proposals during the autumn.

I can assure the Chairman of the Select Committee of that.

In relation to the point that my hon. Friend the Member for Waveney made about piloting and further consultations, we will work closely with the sector and listen to what is being said during consultation. There may well be a case for testing proposals in some way, and we expect to set out further details about how we will go about introducing our proposals. What I underline, again, is that we are listening to the sector.

Sir Edward, I think you are going to pull me up very soon for running out of time, so I would just like to reassure right hon. and hon. Members that the Government have considered the consultation very carefully and have considered the proposals—

Motion lapsed (Standing Order No. 10(6)).