I beg to move,
That this House has considered the First Joint Report of the Work and Pensions Committee and the Communities and Local Government Committee, Future of supported housing, HC 867, Session 2016-17, and the Government response, Cm 9522.
It is a great pleasure to introduce this debate. I welcome the Minister to her place. This is her first opportunity to respond to a debate on the issue, and we look forward to her customary approach to local government matters—I am getting in early before she is taken over by her civil servants and told what to do. She certainly has a long track record with local government matters, having been a councillor, chair of the all-party group on local government and a member of the Select Committee on Communities and Local Government.
I also place on record the Committee’s thanks to the former Minister, the hon. Member for Nuneaton (Mr Jones), who appeared before us to answer questions on supported housing and, more recently, on homelessness. He certainly listened to the Committee on many occasions and responded positively to us; I will say a little more in due course about how positive his response was to our report. I used to tease him a little by saying that his primary job was trying to save the Department for Work and Pensions from itself when it ventured into housing matters and made policy that subsequently unravelled rather badly, having posed serious problems for much of the housing sector on the way.
The joint report is the result of our two Select Committees getting together to address this very important issue. Anyone who reads the Government response will see the wide range of accommodation that is covered by the term “supported housing”, from long-term traditional sheltered housing and extra care provision to what are essentially people’s homes—accommodation where people with learning or physical disabilities may live for long periods, or provision that people with mental health problems rely on. It also includes very short-term accommodation, often for homeless people who have nowhere else to go and need a roof over their heads, but who will eventually move on to more long-term accommodation. The report also covers the very important issue of how to provide accommodation for women fleeing domestic violence.
We probably would not be here this afternoon were it not for the Government’s intention to change the funding arrangements for such accommodation back in 2015 and 2016, and their now rather infamous decision to link payments to the local housing allowance. At least the Minister can relax this afternoon, because she does not have to defend the indefensible, unlike the Ministers who gave evidence to our inquiry. No one could begin to defend relating the costs of supported housing in any way to those of renting in the private sector, because the differences in local housing allowance rates were so extreme and bore no relation to the costs of providing supported housing in different parts of the country. At least we have got there now. At some point, the penny dropped for Ministers and civil servants and they extracted themselves from the impossible position that they had got into. That was certainly a great benefit of the inquiry. I pay credit to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham), who jointly chaired it, for putting Ministers on the spot and making them so uncomfortable that in the Government response they have extracted themselves from that impossible position.
I think I can see how it all came about. Someone in the Treasury must have said, “You mean you pay all this money to these housing providers—you just pay what they ask for? They ask for the rent, you pay over the housing benefit and there is not really any control. We need to anchor the payments to something or other, so let’s come up with a local housing allowance. That’ll do—it’ll provide an anchor so that the providers cannot simply write cheques to themselves.” I am sure that that is how we got into that position, but at least we are not there any more.
Let us not forget, however, that 85% of new development of supported housing in this country was put on hold. We wasted months—indeed, a couple of years—while nothing happened. Although we may be in a better place now than at the beginning, we have still had two years when, despite the urgent need for more supported housing in this country, nothing has happened on 85% of the schemes that were in train. Everyone has said, “Wait a minute. We can’t go ahead because of the uncertainty. We can’t borrow the money because of the uncertainty. We can’t develop the schemes that we all know are needed, because the Government got the initial proposals completely and absolutely wrong.” We should not forget that; indeed, it was worse than that. Organisations such as St Mungo’s that came to give evidence to the Communities and Local Government Committee before the joint inquiry was set up said: “If this carries on, not only will we not develop new accommodation; we will pull out of what we have, because we cannot make it pay.”
My hon. Friend is right to highlight St Mungo’s, which used to be based in my constituency and has done a lot of projects there. It is under a continuing threat: because there is still an intention to rely on local authority grants to fund short-term housing, there is not only insecurity but hostels will have to close.
My hon. Friend is absolutely right: there is an underlying problem. St Mungo’s representatives came to see me this morning and spoke on behalf of a number of providers about the difficulties that still exist, despite the Government’s proposals and the fact that we have got away from LHA rates, as a first move in the direction of sanity. At least that has been clarified, but we should not forget the problems that have occurred in the past two years.
I think the report is excellent. It deals with more than just funding issues; it looks at the role that local authorities play in provision in their area; at how to get people from supported housing into more permanent mainstream housing; and at enabling people to get into work while they are in supported housing. It includes a lot of good recommendations, but I will focus on three key funding issues. I would like some clarification and some certainty from the Minister about where things are going, at least in the medium term. I hope I can also persuade her to think again about two key issues in which the Government have not quite got to the right place.
The first issue is longer-term provision. To some extent, the Government response separates sheltered and extra care housing from long-term supported housing. I accept that slightly different regulatory regimes are proposed for those two sorts of housing, but in essence they will both be funded through the welfare system, as the Government response says. Their funding arrangements look similar, if not identical, so I shall address them together.
I think the Government response is helpful. It is an awful lot better than what we started with. It is clearly right, as we heard overwhelmingly in the evidence we received, that paying for supported housing should be linked to housing benefit, or to the housing element of universal credit when it comes in. What I want from the Minister is a little more explanation and clarification of the wording. The word “control” is used several times, including a reference to
“enhanced cost controls and oversight, ensuring value for money for the taxpayer”.
Of course, everyone recognises that the Government’s job is to ensure value for money for the taxpayer, but what does that phrase actually mean? Does it mean that in the future there will be an effort to bear down on the amount of housing benefit that is paid, to reduce the amount and say, “Well, we paid you the 100% that you requested for housing benefit last year, but next year it’s only going to be 95%, because we expect you to start squeezing the costs that are applicable to this scheme”? Who exercises the controls? Will there be a system with criteria, or will things simply be done on an ad hoc basis for individual schemes?
It would be really helpful in the cases of sheltered and extra care housing, and of long-term supported housing, for which slightly different regulatory regimes are being proposed, but necessarily the words “cost control” come into both of them, if some further explanation could be given about precisely how those cost controls will operate. Who will operate them? Will it be something that is done for three or four years ahead, or will it be something on an annual basis and, if so, how? Such an explanation would be helpful, not merely for our satisfaction here. We come back to this issue of long-term investment. We want more providers to come in with proposals, to get more places and more schemes, but they will only do that if they can satisfy the people they are borrowing money from that there is a long-term future for such schemes and that the money can be paid back. So it is absolutely crucial that we get that right. I am not making a criticism of the proposal as such; instead, I am seeking clarification about how these schemes will operate. So, can we have a bit more certainty about they will operate for the providers in the future? I think we are getting there; we are on the same page, but we want to be clearer about what longer-term arrangements are actually written on the page.
I will come on to something about which I think there is a more fundamental problem, which is the issue with short-term accommodation. I think the term itself causes some difficulties; the Government certainly have difficulties with it. Paragraph 19 of the “Conclusions and recommendations” in this excellent joint report says—I am sure that the Minister has read that paragraph several times already, but I will read it for her again—that
“The Government is right to consider an alternative funding mechanism for very short-term accommodation”.
I will stop reading there, because there is an important word in that sentence. It refers to “very” short-term accommodation. Paragraph 19 continues, “given the emergency nature”—again, those words are important—
“of that provision and the inability of Universal Credit to reflect short-term changes in circumstance.”
I think that that is a given; everyone knows that there have been problems with universal credit in the first few weeks. However, I do not think that anyone thinks that the problems with universal credit are likely to last for two years, do they? Do Ministers think that? Is that why the “short-term” arrangements last for two years under the Government’s proposals—because they do not think that universal credit can be sorted out in two years? I do not know. However, if the Minister thinks so, she is even more pessimistic about universal credit than most of the rest of us are. Anyway, that is the issue.
It was very clear when the two Committees produced their joint report on this subject that they were thinking of accommodation where people literally could not get their universal credit sorted out within a matter of days or very few weeks. I think the period of around 12 weeks is probably reasonable; I think that is the period that most providers are looking at. It is “emergency” accommodation—accommodation for people who have not got a roof over their head; they live there for a very short period. I think everyone accepts that that sort of accommodation needs a different funding model. The problem is that recommendation 19 is being used by Ministers to justify having a completely different funding model for any accommodation that is provided for up to two years, and there is no justification at all in the Government’s response as to why there is that sudden extension from what had been looked at as “very short-term”, “emergency” accommodation for up to 12 weeks to accommodation that is for up to two years.
People from St Mungo’s came to see me this morning and they spoke on behalf of the Riverside Foundation, YMCA and the Salvation Army, which provide around a quarter of so-called “short-term supported housing” units in this country. They said that that extension gives an element of uncertainty to their funding that really causes them major difficulties. St Mungo’s said that 98% of the accommodation it provides will be covered by this ring-fenced grant to local authorities, about which there is absolutely no certainty at all.
I raised the concerns about the need for more clarification and certainty about the long-term funding arrangements linked to housing benefit. However, I think that most providers think there is an awful lot more certainty about those arrangements than there is about some unspecified, ring-fenced grant that can be changed at the stroke of a Chancellor’s pen at any time in the future.
I thank the hon. Gentleman for giving way; he is making an excellent point about an excellent report. May I give him one example of where we need to see more short-term accommodation and where we need the certainty of the financial models that he is talking about? A lot of homeless people suffering from terminal illness have a right to accommodation, but when local authorities and others get together to provide that accommodation, it is exactly the sort of accommodation that he has been talking about. That accommodation, which is so needed in many communities, will not be provided unless this problem is sorted out.
Yes, I think that is absolutely right and again we are back to the point that providers of new accommodation need some certainty, because when they go to borrowers the borrowers say, “Where is the funding stream for the future?”; borrowers want to see that funding stream. That is exactly what St Mungo’s is saying—it will not be able to raise the funds under this proposal that the Government are currently putting forward.
I do not really know why there has suddenly been this extension to two years. There is no justification for it, so I will just ask the Minister, who I accept is new in her post, to have a really good think about it. I know there is still some of the consultation period left—I think it extends next Tuesday—so there is time to rethink and get this right.
I also say to the Minister that this issue is not only about funding for the future but about the nature of the funding and what it says, because if the funding is related to the welfare system—to housing benefit or the housing element of universal credit—essentially it is the accommodation of an individual that is funded. That individual has a relationship with the payment for their unit of accommodation. They are entitled to that accommodation, and they make a payment from their housing benefit or their element of universal credit for the cost of that accommodation. It is a tenancy relationship between the provider and the individual.
As part of the Government’s welfare reform to give responsibility to the individual in such circumstances, I would have thought that that tenancy relationship would have appealed to Ministers. However, the Government are now saying that, with a ring-fenced grant to local authorities, it will not be the individual who receives the money to pay—through the welfare system—for the rent on their property. It will actually be the institution that gets funded. So the Government are moving from an individual system, whereby money goes with the individual as part of their tenancy, to an institutional system, where the money goes to the institution itself.
Does that move fit in with the Government’s welfare reform agenda? It is difficult to see that it does. It is also difficult to see how we are moving towards a system of personal and individual responsibility, with individuals responsible for their own accommodation, when the Government are saying, completely counter to that, “We will have a new system where we actually fund the institution, which will mean that the individual will not be given a relationship with their accommodation and the money they pay towards it.”
Ministers have to think again about this issue. On both counts, the organisations and the providers are saying, “This really gives us so much uncertainty that we’re not comfortable, and our lenders are not comfortable. It will actually stop new provision in the future.” And we go back to the issue of the individual paying rent for their property and having that rent paid through the welfare system, as opposed to a ring-fenced grant for local authorities that institutionalises the whole system in a way that cuts off the tenant-landlord relationship. That is really quite important; I do not think that that element has really been thought through, because it really is quite important.
I will raise just one other issue, as I know lots of colleagues want to speak. Again, it is an issue that I do not think Ministers have really addressed, which is the refuges for women and children. The joint report makes a very sensible recommendation about having a “national network” of refuges. Basically, however, the Government’s response was, “It should all be done at local level”.
Generally I am a localist; I think the Minister knows that. I believe that local authorities by and large are best placed to make decisions for their areas. Local councillors living in the areas they represent know what is good for those areas better than Ministers sitting behind desks in Whitehall offices.
Women’s refuges are a different issue. By and large, supported housing deals with the problems, needs and accommodation requirements of people who live in an area, and in those cases it is right that they remain in that area and are accommodated and housed there. For women fleeing domestic violence, the situation is almost exactly the opposite. If anything, they want to get out of the area where that violence has occurred to somewhere completely different so that the perpetrator does not know where they are. It is important that we see the issue on a more national scale, so that we have places for people to go that are almost certainly not in the area where the violence has happened. I read the Government’s response, and I did not understand why they turned down our recommendation, because it seemed sensible. The recommendation was completely at odds with the rest of the report, in that the provision for that sort of circumstance is different from the other kinds of supported accommodation covered by the report. Will the Minister in her new position have a think about that?
There was overwhelming evidence to the Joint Committee on women’s refuges, but the Government said, “No, we think it is all better done at the local level.” There was no clear justification for turning the recommendation down and thinking it could all be done at the local level. Have they done any impact assessment of whether that would lead to the comprehensive network of provision that everyone wants to see?
I have raised three key issues to which I hope the Minister will respond. They are important if we are to get things right. In the end, getting the funding right means getting the provision in place and maintaining it, as well as ensuring that we get the appropriate new provision for the future.
May I say what a pleasure it is to serve under your chairmanship, Mr Sharma? This is the first debate I have contributed to with you in the Chair, and I very much hope it will not be the last. I note with pleasure how my hon. Friend the Member for Sheffield South East (Mr Betts) opened the debate. The two Committees are fully signed up to much of what he said. I thank the members of the Committees for the work they did. In particular, I thank my hon. Friend the Member for Gloucester (Richard Graham)—he is my hon. Friend on many topics—for leading the Work and Pensions Committee in this joint endeavour. I hope he will keep a longer-term interest in the subject. I am so pleased to see the hon. Member for Waveney (Peter Aldous), because he has had a long-term interest in the area, initiating debates and following things up in the Commons. All that work helps to create the tide of reform that we want.
I also welcome the Minister. Normally people say, “We hope Ministers come to their Departments with open and empty minds”, but I very much hope she is coming to this position with an open and full mind—she will be—because from her experience she knows the answers to many of the issues raised my hon. Friend the Member for Sheffield South East. I hope the Minister clings on to that and educates her civil servants, rather than letting them do the job that they think they do so well of educating Ministers. Mr Sharma, I told you that I am chairing a roundtable in the House on modern slavery and so cannot be here for the whole debate, but I will return, I hope, to hear the Minister and the shadow Minister summing up our contributions.
I thank the Government for their movement in their response on sheltered rent on the key issue of how rents are paid in the longer term, for up to two years. Those rents will be met from state benefits, which is a real improvement. Mention has been made of at least three areas to which we would like the Minister to turn her full mind, both in this debate and in following through. The first area is the real concern about tenancies of from one month to two years. The money is ring-fenced at the moment, but what further guarantee can she give that there will be security of that funding, given that those commitments will outlast the lives of individual Governments? I look forward to hearing from the shadow Minister, my hon. Friend the Member for Great Grimsby (Melanie Onn), on the commitment that the Opposition will make.
The second area is domestic violence refuges. If we stand back, we see that the Government’s response goes back to the Elizabethan Poor Law. They say that this is the responsibility of local government, but local authorities naturally feel that the councils from which families have come should be responsible for paying the bills. We all know that people escape their original parish, as the old Poor Law would have said, because it is not safe for them to reside in that parish. I underscore strongly the point that my hon. Friend the Member for Sheffield South East made: we need a national system of funding that can support a national network. It is fine to talk the talk and say that we are serious about giving people a safe haven from the violence inflicted on them, but we want Government action. The best way of establishing a national network would be through a national agreement on funding.
The final area, which, naturally, my hon. Friend also touched on, is payment for emergency temporary accommodation—or, as those of us who have grown old in the trade would call it, bed and breakfasts. The Committee heard from Neil Couling, the boss-person of universal credit, back in September. He said that this payment would be a locally administered housing benefit. Since then, there has been a wonderful quietness on that front. Why? I hope that the Minister, whatever stick she has for poking into places to stir people up, will give a commitment in this debate to going back to see why universal credit is not delivering on those three fronts.
I end by again thanking the members of both Committees for their work, and particularly the hon. Member for Gloucester for leading on the Department for Work and Pensions side in this incredibly successful report. It was successful in the sense of keeping us all together, and partially successful in the light of the Government response. In summing up, we hope that we will be able to record total success on all fronts.
I echo the right hon. Member for Birkenhead (Frank Field) in expressing my joy at serving under your chairmanship for the first time, Mr Sharma, and at welcoming our new Minister, the hon. Member for South Derbyshire (Mrs Wheeler). As previous speakers mentioned, she brings to the role considerable experience, particularly of local government and how these things work or do not work.
I suspect that there will be a degree of similarity in some of the speeches, because the issues are relatively similar, although we will all have slightly different approaches to them. I am happy to echo the comments of my friend, the right hon. Member for Birkenhead, about the Joint Select Committee report. The hon. Member for Dulwich and West Norwood (Helen Hayes) played an educating role for me, coming as I did from the Department for Work and Pensions side. It was the right hon. Member for Birkenhead who talked me into taking up something outside the comfort zone of the Work and Pensions Committee’s normal remit. It was a fascinating experience.
In his introductory remarks, the hon. Member for Sheffield South East (Mr Betts) suggested that the aim of the Joint Select Committee’s report was to make the Government feel uncomfortable, but I am afraid that was not my objective at all. I felt that our job was to try to come up with solutions to what has been a pretty difficult issue for a long time. If one needed confirmation of that, there is the fact that among the emails that we received from various charities and lobbying groups was an interesting email from the charity Homeless Link, which said it
“recognises the challenge facing policy makers—it is a hugely complex sector, making finding solutions equally complex. However, supported housing provides a lifeline for thousands of vulnerable people and it is therefore imperative that we get it right.”
I think that all of us would agree with every word of that. Homeless Link went on to say that it
“welcomes the Government’s commitments around homelessness and rough sleeping.”
That is a very promising start.
The brief from the Communities and Local Government Committee rightly highlights the areas in which the joint report, the Committee and the wider sector are very supportive of the Government’s initial report in October 2017, responding to our recommendations in April. Crucially, the Government decided not to apply local housing allowance rates to tenants in supported housing. That was a clear recommendation in our report, and arguably the single most important one. I welcome the Government’s response in October, and hope that all right hon. and hon. Members here do likewise. My hon. Friend the Member for Nuneaton (Mr Jones), who was the Minister for this portfolio at the time, made it clear that, broadly speaking, the Government’s response built on the report that we had submitted.
The right hon. Member for Birkenhead and the hon. Member for Sheffield South East both highlighted that there remains concern about what I would call the issue of the guarantee. For example, I received an email from Joe Feeley, the chief executive of Emmaus in Gloucestershire, which does an outstanding job for the people it helps, in which he said:
“Although the proposals state that funding for supported housing costs would be ring fenced, we are concerned that in the long term this is difficult to guarantee.”
The right hon. Member for Birkenhead made precisely the same point. Philosophically, we might all take the view that it is pretty difficult for any Government to guarantee everything forever, but it would be helpful if the new Minister could reassure Emmaus, and Members across the House, about how supporting housing costs will be ring-fenced, and the Government’s intention to continue that throughout the life of this Parliament.
I thank the hon. Gentleman for giving way, because I am here specifically to speak about Emmaus. One of Emmaus’s concerns is that it may be limited to the two-year period of funding. It would be so helpful if the Minister confirmed today that, although we cannot have an open-ended commitment, it will be a lot longer than two years.
I am grateful for that intervention, because clearly the two-year issue is one aspect of this matter. However, I think the wider issue is probably around the definition of “short term”, as has been mentioned. I had an interesting briefing from representatives of Rethink Mental Illness, who said that they
“warmly welcome the decision not to proceed with the LHA cap, and to place long-term supported housing funding on a sustainable footing.”
However, they went on to raise
“concerns about some of the proposals for ‘short-term’ supported housing”,
which I think is normally defined as being under two years. That seems to be the issue that worries Rethink Mental Illness and other mental health organisations. Rethink Mental Illness has issued a joint letter with nine other organisations, aiming to tie down a little the definitions of “short term” and “very short term”. I hope that the Minister can shed some light on that, but we will all have to bear in mind that the consultation closes on, I think, 23 January. It will be difficult for the Government to say too much in advance of that, so I assume that the main purpose of today’s debate is for us to get our points in before the Government’s response to the consultation, which will no doubt include some of these points from charities.
On that key point, those in the Treasury always want to control everything and to ring-fence funds, so that nothing more can be used. However, if the funds run out, the need of the people whom we are talking about is still there. We need to get that point over to Treasury Ministers, and I am sure that the Minister would wish to do that, so this is supportive of her case to the Treasury. It seems to me that expenditure should be demand-led, not Treasury-capped and controlled. The idea that we would exclude people who are among the most vulnerable in our society because the money had run out seems to me absurd and wrong.
The right hon. Gentleman makes his point with his usual passion. I will not offer a lecture to the Treasury on how they should provide and quantify the amounts of money for particular parts of the supported housing provision that the Government are looking at reshaping. At this stage, we are trying to register our concerns, as he has done, on aspects of the support housing report that we feel are not yet reflected in the Government’s position. We are also trying to encourage the Government, when looking at the response to the consultation, in which all these points will no doubt come up, to think widely—this is the great advantage of having the Minister in her new role—about what the Minister knows from her experience, and what I and other Members will share today from our experiences, about what works best on the ground.
That brings me to my last main point, which is about domestic violence refuges. Two really good points have been made. The first, made by the hon. Member for Sheffield South East, is that domestic violence refuges are slightly different because in many cases the individuals want to be out of the area—not just the parish, as my friend, the right hon. Member for Birkenhead, mentioned, but quite often outside the constituency in which the violence happened. However, they will not all want to go to the same constituency, of course; they will want to move to different places, not least depending on where they have family links.
I can easily recall a woman fleeing from stalking in my constituency who wanted to be very far away, not only because of her fear of the individual who had stalked her, but because she wanted to go with her young children to where her mother was, to receive that additional family support. The issue is not just one of national funding, or having a national network, but of access, and how that works practically. If somebody fleeing domestic violence wants to move, for the sake of argument, from Gloucester to Birkenhead to take advantages of family links there, how will that work in practice? I can imagine that such access could be difficult.
I know the new Minister has experience of domestic violence refuges; I think I am right in saying that she helped to set one up in her constituency. That side of the argument is about the importance of localisation, as the hon. Member for Sheffield South mentioned. These things are very often best done on the ground by people who know how to do them. Bishop Rachel of Gloucester, in her new role, has very much championed a refuge that the diocese has effectively provided in the centre of our city. That is a really good example of a local initiative that I certainly would not want ruled out as a result of a very top-down approach, led by the man or woman in Whitehall who knows best.
Does the hon. Gentleman agree that it is important that the full cost is met, so that local authorities do not end up with a shortfall? That is the most important thing that I am calling for as Liberal Democrat spokesperson for local government.
I quite understand where the hon. Lady is coming from. That will always be a concern for all of us. The Minister knows, given her experience of running a local council, that local government is always concerned about money and the balance. No doubt she will say something about that.
All hon. Members have come to this debate in an open, warm-hearted spirit. This is not a party political debate; it is about finding a solution to a difficult problem that has plagued successive Governments for some time, and for which there probably will never be an absolutely perfect remedy, not least because there will never be an unlimited supply of money, notwithstanding the optimism of the right hon. Member for Kingston and Surbiton (Sir Edward Davey) about changing the Treasury’s way of doing things. What we can do is further explore the report’s recommendations to which the Government have not offered a complete response yet—no doubt they are waiting for the results of the consultation before doing so. Perhaps we can encourage the Minister to share some of her early thinking today.
I will finish by asking the Minister two questions. The first is about domestic violence refuges. Will she share a bit of her experience and her instincts about local initiatives by charitable, faith-led organisations that want to create local refuges for people who are happy to stay within a constituency? There is also the wider issue of how we help those who want to be a long way away, and how they can access refuges elsewhere.
My second question is about young people in supported housing, some of whom are put off looking for work by high rents and, sometimes, the impact of short-term employment on their benefits. Will the Minister share what she thinks the new funding model will do to change that? How will it give more support to such young people?
It is a pleasure to serve under your chairmanship, Mr Sharma. I am pleased to speak in this debate as co-chair of the joint inquiry into the future of supported housing. It was a pleasure to work with the hon. Member for Gloucester (Richard Graham) and members of both Select Committees on the inquiry. It was a privilege to co-chair the inquiry on a part of the housing sector that makes a significant difference to the lives of those who rely on it.
The inquiry heard extensive evidence from residents in supported housing in formal oral evidence sessions, informal evidence sessions and visits and as written evidence. I have also visited several supported housing settings, both in my constituency and further afield, to speak to residents and providers about their experiences on the ground.
Supported housing enables a wide range of residents who face particular challenges in life to live independently and with dignity, and it enables them to access the support they need. It delivers substantial savings to the public sector, which are estimated to be £3.5 billion each year. Without supported housing, many residents would end up more reliant on the NHS at a much greater cost, or in some cases in the criminal justice system.
The Government’s approach to supported housing over the past two years has thrown the sector into disarray. The initial announcement that the local housing allowance cap will apply to supported housing, followed by a year of uncertainty, caused providers to put 85% of planned new schemes on hold. Many providers stated that they feared that they would have to withdraw from the supported housing sector altogether because the funding simply would not stack up. Our inquiry clearly demonstrated the financial impact that the LHA cap would have on the sector. In particular, it highlighted the fact that the calculation of LHA, in relation to private sector rents for general needs housing in local housing market areas, made no sense at all for the funding of supported housing. There is no direct or necessary relationship between private sector rents in a given area and the cost of delivering supported housing.
I am pleased that the Government accepted that argument and announced last year both that the LHA cap would not apply to any type of supported housing, and that a new type of sheltered rent would be introduced to cover the cost of sheltered housing. I have spoken to several providers since that announcement, and although it is welcome, they have many questions about the details of the proposal. They are anxious to know how the formula for sheltered rent will work, which schemes will be deemed to be sheltered housing, whether there will be a separate sheltered rent rate for extra care housing, and what provision there will be for sheltered rent to increase to keep pace with inflation and increasing demands. I hope that the Minister is able to answer some of those questions today.
I want to focus on two remaining areas of the inquiry report and the Government’s response. The first is the Government’s refusal to accept the inquiry’s recommendation to establish a national network of domestic violence refuges. Refuges are unique in the supported housing sector because to a large extent they serve women from outside the local authority area in which they are situated. The current system relies on local authorities’ mutual recognition of the need for refuge provision and their willingness to fund provision that they know will not generally be used by local women.
The cuts to local government funding over the past seven years have put that arrangement under great strain. Many councils feel that they have no choice but to make cuts to their provision, which is creating a postcode lottery in many areas of the country. For example, there are no longer any domestic violence refuges in the county of Cumbria. Having looked carefully at the evidence provided by Women’s Aid and others, the inquiry reached the view that the postcode lottery could be addressed only if the Government committed to establish a national network. Full devolution of funding to local authorities risks having the opposite effect. I therefore ask the Minister to reconsider the Government’s rejection of that recommendation and to commit to working with Women’s Aid to establish a national network of refuges to guarantee a place for every woman and child across the country who needs one.
That links to the point made by the hon. Member for Gloucester (Richard Graham). It is possible that the local initiatives that he praised so much will continue to operate, but they need funding. They are not dependent on local funding. Such measures often do not work unless they are supported strongly locally, but the funding is key.
I agree entirely with the sentiment that my hon. Friend expresses. We need to guarantee even, appropriate provision across the country. That is the problem we seek to solve, and so far there is no evidence that the Government’s response addresses that concern in any way.
The second area I want to focus on is the funding of short-term supported housing. The inquiry report said:
“The Government is right to consider an alternative funding mechanism for very short-term accommodation, given the emergency nature of that provision and the inability of Universal Credit to reflect short-term changes in circumstance. The Government should consider a system of grants paid to local authorities so they are able to commission emergency accommodation in their areas.”
That recommendation is clear. We were talking about emergency provision and the specific problems of universal credit, and we were seeking to avoid a situation in which providers end up chasing arrears arising from the universal credit claims process in relation to residents who no longer live in their provision. I was therefore very surprised that the Government chose to define short-term supported housing as housing provision for up to two years. I have spent considerable time since the Government’s response was published speaking to a range of supported housing providers, and it is clear that the announcement raises more questions than it answers, and that there are very serious concerns about its implications.
I want to raise some of those concerns about the Government’s approach to short-term supported housing with the Minister today. First, the implication of the Government’s announcement is that short-term supported housing will move from being mainly demand-led, because eligibility for funding follows the individual resident, to a local authority commissioning model. That huge change raises many questions about the basis for commissioning. What guarantees will there be in relation to the range of provision that any given local authority will have to commission? What is to stop a local authority, for example, choosing to commission supported housing for people with disabilities but not for ex-offenders or people with addictions, despite there being a need for all types of supported housing in their area?
Secondly, once the supported housing has been commissioned, how will the local authority or the provider assess the eligibility for individual places, and who will have responsibility for that decision-making process and for reviewing decisions that go wrong and providing redress? There is a recognised shortage of supported housing across all types of provision, and in that situation decisions about eligibility can be difficult. How will the application and assessment process work for short-term supported housing under a commissioning model?
Thirdly, I am concerned about the level of funding and the lack of a mechanism for increasing funding. As I understand it, the proposal is for grants to be made to local authorities based on the housing benefit spend on short-term supported housing in the area. That will not capture the costs of support and specialist buildings, and it embeds the current shortage of supported housing into the funding system. It is not clear that, under that model, the Government will ever address the shortage or be able to keep pace with the increasing demands across many types of supported housing.
Fourthly, many providers of supported housing have expressed concern that the commissioning model will lead to an erosion of the housing rights of supported housing residents: since residents will not be paying rent, they will not have a tenancy, and that leaves open the possibility of an individual’s place in supported housing being taken away because someone with a greater need comes along, or because the relationship with staff at a particular scheme breaks down. There is no contractual basis to ensure the tenant’s rights. Supported housing residents are often among the most vulnerable people in our communities, and if the Government change the way in which their housing is funded they must make clear how their rights will be protected and guaranteed.
Finally, many providers have told me that they believe a fundamental problem with the definition of supported housing is as housing for up to two years. Many of the best-supported housing providers work in a resident-focused way, so residents may live in their scheme for as long as they need. The same scheme may include residents who are there for one or two years, and others who are there for much longer. It may not be apparent at the outset how long an individual tenant will need to live in that particular provision. So the definition inevitably creates the problem of a cliff edge—the clock will start ticking at the start of the two years and, irrespective of how individual residents are doing, they and their family will know that at the end of two years they will face a crunch point in the funding of their home.
Providers of supported housing for people with mental health needs, including Rethink Mental Illness, have highlighted the particular challenges that the two years will present for people with mental ill health, whose recovery often relies on minimising sources of anxiety and creating an environment of stability. The risk is that, for many of those residents, a two-year cliff edge could itself make their health worse and set back recovery.
Those are not trivial concerns. The Government have proposed a major change to the funding model for supported housing of up to two years, without fleshing out any details. The result is that, following the two years of uncertainty that the Government have already thrust on the supported housing sector, providers are left with many questions and grave concerns about their ability to sustain the homes they provide to some of our most vulnerable residents.
I therefore hope that the Minister will take this opportunity to clarify the many unanswered questions, to listen to the concerns of the supported housing sector, and to produce a funding framework that will guarantee the provision we currently have and provide for an increase in supply to address shortfalls and cope with increasing demands. I end where I started. Supported housing is extraordinarily good value for money, and it is highly valued by those who rely on it. It is simply a false economy for the Government not to fund supported housing properly.
I apologise, Mr Sharma, for the fact that I will need to get back to the main Chamber, and so cannot remain for the rest of this debate. However, I wanted to speak on behalf of my Emmaus community in particular.
There is only one Emmaus community in Wales, and I am fortunate to have it in my constituency. As many Members know, Emmaus was started in 1991. It provides accommodation, training and meaningful work for those who are homeless or especially disadvantaged. In 2015-16 Emmaus supported more than 1,100 individuals, 12% of whom moved on into employment. According to estimates by the New Economics Foundation, the return on every £1 invested in Emmaus is £11 in social, economic and environmental benefits. There are savings to the Department of Health on hospital and emergency admissions, to the Ministry of Justice from keeping people out of prison and reducing crime and reoffending, and to local government on hostel accommodation and drug and alcohol services. The stability and rehabilitation provided to Emmaus companions is crucial in enabling them to rebuild their lives and move into paid employment.
The chief executive of Emmaus South Wales, Tom Clarke, has talked to me about his very real concerns about the Government’s new commissioning model, which he fears could undermine the excellent support Emmaus provides. There is a lot of concern about the uncertainty over the security and stability of funding for short-term accommodation providers such as Emmaus. It would be shameful if its work had to cease in 2020 because it could not secure the necessary funding.
The bulk of Emmaus income is generated from its core business activities of collecting, refurbishing and selling donated furniture and household goods. That brings in about £5 million per year. But Emmaus also needs the contribution of housing benefit—that is £5 million per year—to help transform the lives of the vulnerable people who rely on its support. Emmaus needs complete certainty that the ring-fenced funding for short-term supported housing will be guaranteed long term.
As I said in my intervention on the hon. Member for Gloucester (Richard Graham), there are major concerns about the definition of short-term accommodation and how it will impact on the likes of Emmaus. Emmaus’s reading of the new proposals is that it would fall into the short-term accommodation category when seeking funding under the new system—“short term” being defined as a period of up to two years. About 20% of Emmaus residents stay for longer than two years, after which their funding from local authorities would stop.
It is crucial to ensure that the work of organisations such as Emmaus continues. Through work and training, Emmaus does so much to help people to rebuild their lives, to contribute to society while removing risk and threat for many of them, and often to regain links to their families, with whom they might previously have had a damaging relationship. I cannot say enough how tough a regime Emmaus runs—it is not a soft option; it is a tough thing to do and a hard way back into society, and the people doing it deserve our support.
Emmaus welcomes people with alcohol and drug addiction, or mental health issues, ex-offenders and those who struggle to function in mainstream society. The majority of people Emmaus deals with are former rough sleepers. There is no limit on the length of time an individual may remain in an Emmaus community, but those who are ready to move on are supported to do so.
Emmaus’s pioneering approach saves the taxpayer money—we would be investing to save. Emmaus takes £9,000 in housing benefit for each one of its companions, whereas the cost to the public purse of one rough sleeper for 12 months is estimated by Crisis to be about £20,000. That is a huge saving for the Treasury, which likes to save money.
We must learn the lessons of the practices implemented by Emmaus. If the Government are truly to meet their stated objectives of securing the supply of supported housing and strengthening the focus on outcomes and oversight, they should heed their own guidelines and look to support the Emmaus communities. It is essential that bodies such as Emmaus are not damaged by Government proposals. I am sure that the Government have no desire to damage Emmaus, but they might, unless they are aware of the unique Emmaus funding model. In return for work, people get food and accommodation, and Emmaus gives that in return for just one benefit, provided by the state: housing benefit.
It is a pleasure to serve under your chairmanship, Mr Sharma. The right hon. Member for Birkenhead (Frank Field) is no longer in his place, but I congratulate him and the hon. Member for Sheffield South East (Mr Betts) on securing this debate through their efforts, and those of their Committee members, to produce their groundbreaking and constructive report of 1 May 2017.
I welcome the new Minister, and pay tribute to her predecessor, my hon. Friend the Member for Nuneaton (Mr Jones), for his work over the past 18 months in helping us to move towards the goal that we are all striving for: that of putting the future funding of supported housing on a secure, sustainable and long-term footing. It is vital to do that if we are not to let down vulnerable groups, whether they are elderly, young, have physical disabilities, are fleeing domestic violence, or face mental health challenges and anguish. The demand for such care and support is rising, because we have an ageing population, and increasing levels of mental ill health and learning disabilities.
This is a difficult task, as the sector is made up of many sub-groups with different challenges and needs. It is necessary to do a lot of background work, to listen to the views of all interested parties, and to make proposals that will stand the test of time and help to secure much-needed investment in the sector.
It is important to recognise the good work that many people and organisations have done over the past 18 months. Providers, charities and their representatives have participated in consultations and have provided the Government, MPs, and peers with well-reasoned proposals. Credit is due to the Government for carrying out the first evidence-based review for 20 years, and for conducting two consultations in which they fully engaged with the sector. They listened to their concerns and have set up task and finish groups.
The Government have also provided a significant amount of money for supported housing schemes, such as the shared ownership and affordable homes programme, the care and support specialised housing fund, and funding for women and girls fleeing domestic violence. It is also important to recognise the very influential joint report of the Select Committees. They did a great deal of listening and thinking, and they have come up with constructive proposals that significantly move forward the complicated process of finding the right solutions.
It is appropriate to highlight the work that Lord Best, Housing and Care 21, Riverside, the Home Group and Hanover Housing Association did to analyse data from approximately 43,000 supported housing and older people’s tenancies across the United Kingdom, to demonstrate that the Select Committees’ supported housing allowance proposal represented a viable and workable approach.
My hon. Friend has been doing a great job on this subject for a long time, as other Members have said. When Lord Best and the five supported housing providers, including Riverside, analysed some of that data, they were very supportive of the Government’s principle that there should be some control of costs in the sector, and of having diversity in approaches, recognising that costs vary substantially across the country. We hope that that will be reflected in the Government’s eventual position. Does my hon. Friend agree?
I do. That illustrates the point that the big challenge is in how to respond to local needs but not, as the hon. Member for Dulwich and West Norwood (Helen Hayes) said, create a postcode lottery effect.
The Government’s revised proposals, which they announced at the end of October, were generally a step in the right direction. I hope that through the consultation that closes next week, it will be possible to address the outstanding concerns, so that the Government can arrive at a funding scheme that we can all support.
Like colleagues, I received many briefings before the debate, and I will highlight some of the feedback. The Home Group, which is active in the north-east, Cornwall and East Anglia, including Lowestoft in my constituency, advised me that the Government’s October announcements gave it the increased confidence that it needed to get on with building supported housing services. It announced a £50 million investment package, which will commence in March, for three new supported housing schemes in Havant, Calderdale and Scarborough. It advised that the removal of the local housing allowance cap enabled it to commit to those developments, but it emphasised that it is vital that the detail of the new supported and sheltered housing funding proposals—such as the service charge cap—does not undermine the development of additional capacity, which we desperately need.
The Home Group believes that the overarching policy direction in this consultation is the right one; there is differentiation between short-term, sheltered and extra care, and long-term supported housing, which enables providers like it to design different funding mechanisms that cover legitimate costs. It recognises the diverse nature of its client groups in the sector. It stresses that it is essential that the three models work coherently alongside one another, as a pathway. As one of the UK’s largest providers, it works nationally with customer groups that fall into each of the three funding models. A customer may come to a service due to crisis, and thus will be eligible for short-term funding; however, they may depend on long-term support. It is therefore essential that a customer can move seamlessly through the pathway, and that a single scheme can efficiently incorporate two or more of the funding models.
We have heard that providers’ main concern with the proposals is about short-term housing. Those who have raised worries include the National Housing Federation, Anchor, Hanover Housing, Housing and Care 21, Riverside, YMCA, St Mungo’s, the Salvation Army, the Supported Housing Alliance, Rethink Mental Illness, and Emmaus, which has a community in Norfolk, near Bungay, which serves my constituency. The long list tells a story.
Riverside, St Mungo’s, YMCA and the Salvation Army have highlighted three concerns. First, the ring-fenced local authority block grants do not provide the same protections and rights for those living in short-term supported housing as for those living in long-term supported housing. They regard that as a backward step and a return to an institutional model. Secondly, they highlight that the proposed policy is moving in the opposite direction from universal credit, which seeks to encourage independence, with claimants managing their own housing costs. Thirdly, they point out that a discretionary local funding system would not provide the assurance required by providers seeking either to develop much-needed new schemes or to invest in the necessary upgrading and repairing of facilities.
Generally, funders lend on a 30-year basis, and the current model of benefit-backed rental income has enabled the sector to borrow significant sums at highly competitive rates. In contrast, local authority contracts normally last between three and five years only; that will not provide the necessary security of revenue to obtain private finance. There is no guarantee that ring fences will remain in place; indeed, recent history suggests that they are dismantled pretty quickly.
Fourthly, although authorities already commission services that reflect local needs, the proposals will extend this commissioning approach to housing costs, including rent and service charges. That will make providers completely reliant on local authorities for all funding. There is a worry that housing providers’ loss of independence will undermine sector viability and stifle innovation. Already, an example has been brought to my attention of a local authority specifically requesting, in tenders, that housing costs be reduced.
Finally, the organisations point out that establishing a new funding system for short-term supported housing requires complex arrangements that impose expensive administrative burdens and bureaucracy on local authorities. Their alternative proposal, to which I urge the Government to give serious consideration, is threefold. First, they propose that housing costs remain in the welfare system. Secondly, instead of devising a complicated new funding system, the Government should review the administration of universal credit, and in particular the speed with which claims are administered, so that it can work better for cases of short stays. Thirdly, in services where the typical length of stay is such that universal credit cannot cover housing costs—for example, where the stay is a matter of days or weeks as opposed to months—localised funding should be an option. This localised funding model could help with the wait for housing costs to be met during the initial assessment period.
There has already been mention in the debate of the need, highlighted by the National Housing Federation, to tighten the definition of short-term services in the consultation paper. It is very wide and should be tightened, so that it is clear that the local system covers short-term emergency accommodation, where people stay for a period of weeks, rather than months. That would be in line with the recommendation in the joint report, and it would make the system fit better with universal credit.
Does the hon. Gentleman share my concern that if we look too much at how to get a saving out of the service, and look at other local authorities, we miss the fact that services for short-term supported housing are extremely good value for money, because they are preventive and they help people to find help before their issues worsen?
The hon. Lady is right. It has been said before that if we get the supported housing right, we save the national health service money. As ever—we are always making this plea—the Government need to break out of departmental silos and think holistically. I am sure that the Minister, in her new position, will take a sledgehammer to those silos.
I would like to highlight feedback I received from the Professional Deputy Service, which is based in Suffolk and supports individuals who lack the capacity to manage their property and personal affairs. In its response to the consultation, it emphasised the importance of the most severely disabled people with housing needs being brought into a local strategic planning and provision process. I will look to facilitate that in the coming months by working with the Professional Deputy Service, local councils and housing associations.
The partnership between the supported housing sector, Parliament and the Government is moving in the right direction in putting in place a long-term funding framework for supported housing, but there is clearly still work to do to address the significant drawbacks of the proposals for short-term accommodation, to properly synchronise supported housing processes with those of universal credit, and to provide the seamless journey articulated by the Home Group. We need to complete that task, which is so important to the dignity and wellbeing of a diverse, often vulnerable but very important group of people.
It is an honour to serve under your chairmanship, Mr Sharma. I will be very brief; as I said when I apologised to you earlier, I have to leave to go to a funeral in Bedford.
I share the concern outlined in the Select Committees’ joint report that the Government do not seem to be aware of the impact of their funding proposals on the supported housing sector. Some vital support services —often those for the most vulnerable—depend on discretionary funding from local authorities. The home- lessness charity Emmaus provides a home and meaningful work to more than 750 formerly homeless people across the UK. It has a community in Carlton, about 10 miles from my constituency, and has helped many rough sleepers in Bedford. The chairman of its board, Frank McMahon, recently wrote to me to outline his concerns about its future.
Much support for homeless people provides them with only a bed for the night and a hot meal. The next morning, they are back on the streets. The Emmaus model is sustainable and yields fantastic results. Many of the men and women who join an Emmaus community are not job-ready, but they gain skills and experience that often help them to gain employment when they move on. Although the Government’s proposals state that funding for supported housing costs will be ring-fenced, there is real concern that that will be difficult to guarantee in the long term.
Many supported housing providers have faced severe financial hardship since the removal in 2009 of the ring fence for the Supporting People programme. It is imperative that funding for housing costs does not follow a similar path. Introducing competition for funding for women’s refuges or schemes such as Emmaus is risky and short-sighted. Providing housing is very different from running a service, yet someone who read the report might think the Government were talking about commodities, not vulnerable people with complex problems and past traumas to overcome.
A Women’s Aid survey of refuge providers found that a one-size-fits-all funding model for short-term accommodation would force more than half of refuges to close or reduce their provision, resulting in 4,000 more women and children being turned away from the life-saving services they desperately need. Removing short-term accommodation from the mainstream benefits system would mean that residents in supported accommodation no longer had a right to claim housing benefit, and removing the financial underpinning of a rent agreement between landlord and tenant would risk undermining residents’ security. Rather than adopt a localised commissioning model for supported housing, the Government should use existing housing benefit arrangements as the basis of a new funding model, with enhanced regulation, auditing and cost control.
As ever, it is a pleasure to serve under your chairmanship, Mr Sharma. I congratulate my hon. Friend the Member for Sheffield South East (Mr Betts) and my right hon. Friend the Member for Birkenhead (Frank Field) on the work that has been done on this important issue.
I am sure that I am not alone in having been contacted by constituents who support St Mungo’s. It is worth quoting something that they said in their letters:
“People who are homeless should enjoy the same level of security as those with long-term needs, and therefore should have their housing costs met through the welfare system wherever possible. The current proposals leave them with less security than those in long-term supported housing or private renting, as they must rely on local funding based on estimated need rather than claiming benefits directly to pay their rent.”
That shortish sentence sums up well the dilemma that we face with short-term housing. I intend to confine my remarks to short-term supported housing, because I think there is an emerging consensus that that is where the problem lies.
First, I pay credit to Riverside, which has been cited on more than one occasion, and in particular to Jenny Luckett, for its briefing. I should point out that any errors of fact or misjudgments are mine, not Riverside’s. This issue is important to Riverside, because it currently has 2,600 bed spaces in short-term accommodation, which accounts for 64% of its supported housing. Obviously, it has a significant stake in the Government’s proposals, as do the people who rely on it for those services.
I will raise four issues and then make four suggestions to the Minister. By the way, I congratulate her on her new responsibilities. I apologise that I will not be present until the end of the debate—I need to go to a constituency engagement—but I shall read her response with great eagerness tomorrow.
The first criticism that housing associations make is that the Government’s proposals are a lost opportunity to prepare tenants to engage with the welfare system and develop a direct relationship between their housing costs and their personal budgeting. Given the way it is proposed the system will work, that relationship will be broken.
Their second criticism, which others have made more fully so I will not labour the point, is that tenants in short-term supported accommodation will lose basic rights. People already find themselves in difficult positions only to find that they have fewer rights than others in different circumstances. Surely, we do not want that situation to get worse.
Thirdly, Riverside makes the point that providers will lose independence because of the way it is envisaged local authorities’ commissioning role will work. Control over things such as cleaning, the provision of heat, light and power to common areas, and paying the mortgage will, to a large extent, be taken out of providers’ hands. Riverside believes that, in the long term, that loss of independence may undermine the viability of providers and stifle innovation.
Fourthly, there is concern about the impact of the proposed changes on the growth of the sector. I will not labour that point because it has been made by others, but lenders in some such schemes have great concerns and say they will have problems with lending on some schemes in the future. If that is the case, it is a problem that clearly needs to be addressed.
In concluding, I will make four quick points. First, the default position for all supported housing, including short-term, should be that housing costs should remain in the main universal credit system, allowing the Government to meet their wider policy aim of moving everyone on to a modernised welfare system. Secondly, the Government should review the administration of universal credit, in particular the speed with which claims are administered, so that it works better for tenants living in supported housing. That point was made in different ways by others, but I am sure the Minister will agree it is important.
Thirdly, providers should be able to opt into a localised scheme based on a grant system for the small number of schemes where the typical length of stay is such that it will not be possible for tenants to establish universal credit claims to cover their housing costs. Finally, any staffing costs currently met through housing benefit that cannot be met through universal credit under the revised service charge eligibility rules should be met as part of the local authority-administered grant system. Such support from dedicated staff often makes the real difference in moving on to something more suitable and, after traumatic experiences, enables people to get their lives in order.
Those are the points I want to make. I know the Minister will listen carefully, and I apologise again to her and to my hon. Friend the Member for Great Grimsby (Melanie Onn) for not being here for their winding-up speeches. I hope the Minister will take into account the important points made by so many during the debate.
It is a pleasure to serve under your chairship for the first time, Mr Sharma, and to engage with the new Minister for the first time, too. She and I share a couple of things in common. We share a background in local government, but we also come to this place from the east midlands. In the east midlands, we are very practical and pragmatic people, and it is that practical and pragmatic side of the Minister that I intend to appeal to today.
I congratulate the Work and Pensions Committee and the Communities and Local Government Committee on their excellent joint report. When I read it, I find it impossible not to note the date it was published: 25 April 2017, when I was just a twinkle in the eye of the Nottingham North electorate. I say that not for the journey down memory lane, but because when I was preparing to speak I looked around the Chamber and noted colleagues in their places, including my hon. Friends the Members for Bedford (Mohammad Yasin)—who is no longer in his place—for Blaydon (Liz Twist), for Weaver Vale (Mike Amesbury) and for Ipswich (Sandy Martin). All of us are new and we all come from local government. It is no surprise that any of us would make supported housing a priority in our early months, because it is incredibly important, and it does not take much time in local government to grasp its impact on 700,000 of the most vulnerable people in our society.
Whatever we do in the changes we make, we ought to be careful. I welcome the Government’s intention to find a long-term sustainable funding mechanism, but we need to understand the impact that even tiny alterations make and we must be wary of unintended consequences.
I rise to talk about merely 1% of the changes—the Minister will be pleased to hear that she will get only a hundredth of the speech of which I am capable—which is the 1% that relates to domestic violence. I am concerned about possible unintended consequences. It may be only 1% of the funding, but it is an extraordinarily high-impact element of public funding, and the stroke of a Minister’s pen can unwittingly close a refuge, when failure to get into a refuge could be life-or-death on that night for an individual.
Mr Sharma, I am sure that you, the Minister and all Members the Chamber follow my contributions avidly, so you may be aware that I raised this topic in a debate on refuges on 12 December. I also raised it in my first question to the Prime Minister, on 13 December. I make no apologies for a little repetition of that material, because we are reaching a crunch moment.
As the consultation comes to a close on Tuesday, I will be at No. 10 with Women’s Aid and others to present a petition with 130,000 signatures. Now, however, is a moment for Ministers and all hon. Members to be clear about our direction and what change we ought to make. I hope to encourage the Government to make an exceptionally timely change now, and there is a real opportunity for that by removing this tiny fraction from their proposals.
Why do I suggest that? It has been mentioned by others, including my hon. Friend the Member for Sheffield South East (Mr Betts) in his excellent opening speech, that the strength of domestic violence refuge provision lies in having a national network of refuges. It does not take a great leap of the imagination to understand that, when a survivor needs to flee her abusers—it is mainly women—she may need to flee a great distance from where they live. Women’s Aid research shows that is the case in more than two thirds of instances.
It is not that there might be a need for a national network; there absolutely is a need for a national network, because the vast majority of the time an individual in one location will need to go to another. An individual in Nottingham actually has a greater interest in what decision makers are doing in Birmingham at the moment than in what is happening in Nottingham. Locally devolving funding knocks into tiny pieces a complex ecosystem of resources and threatens the good operation of services.
There is a compelling case for the service to be national, not local. That is not just my conclusion or that of Women’s Aid, but the substance of the report, both in paragraph 105 and conclusion 20. The report states the “unique challenges” that the sector faces, but there is more to it.
I am a big fan of local devolution. It is probably a common trait of those who have spent time in local government that we feel we could do more if given the opportunity. I am also, for my sins—I do not talk about this often because there is no credit in it, only blame—a wily veteran of local authority commissioning. I led on commissioning in Nottingham for three years, and if I were still in that role I know how I would handle a devolved pot: I would seek to reduce my unit costs by creating an economy of scale. There is no great science to that. However, with regard to refuges, I would handle that in one of two ways. I would either try to granulate the funding to work out which bit is for refuges and commission individually, in which case I have lost all the value of the economy of scale, or—I fear there is a growing trend towards this; there was when I finished last June—I might put my refuge provision into the general pot and explore dispersed tenancies rather than refuges as a way to house these people who really need help. There is energy in that direction not just in Nottingham but up and down the country, but it is very early days for that research, and I would not want to see a change here that makes that a fashion before we truly understand what it might mean. I certainly would not encourage that direction.
[Sir Graham Brady in the Chair]
We know what Women’s Aid says about the potential impact of the funding change: perhaps up to half of the refuges that responded to its survey may have to close or downsize as a result. We are talking about a high impact. There is a compelling case to extract the money nationally and for Ministers to commission a national network. That would get the economies of scale and give us joined-up provision. The excellent report, at conclusion 20, says that the Government should work with the sector to devise a new national model, and I wholeheartedly agree.
This pragmatic new Minister has a great opportunity. It is the perfect moment, because late this year we will be availed of two wonderful opportunities. The Government have already announced that by November refuge funding is to be reviewed, and by the end of the year we will see new domestic violence legislation, which Members across the House await enthusiastically. This is a great moment for the Government to grasp this issue, pull it out of the changes and wait for that moment at the end of the year, work with the sector as suggested and come out with a funded, planned and effective national network of refuges. I believe that is the moment we have arrived at. Two Select Committees, Women’s Aid and the domestic violence sector, more than 130,000 people via an online petition and so many others are urging Ministers to take that new course. If they do, I think we will get something truly valuable out of it. I commend the report and that change of action, and I hope the Minister will too.
Sir Graham, it is a pleasure to serve under your chairmanship this afternoon. I join colleagues in welcoming the joint report between the Communities and Local Government Committee and the Work and Pensions Committee on supported housing, and congratulate them on securing this debate.
A safe, secure and supportive home can be the key to improving or repairing lives and to unlocking people’s potential, as has already been acknowledged. Supported housing helps hundreds of thousands of the most vulnerable people across the country to live independently or to turn their lives around. That is why it must be a priority for all of us in this House.
I welcome the Government’s change of heart on funding for longer-term supported housing, but I remain extremely concerned, along with many of my colleagues, about the funding and provision of short-term supported accommodation services with a target length of stay of up to two years. As my hon. Friend the Member for Sheffield South East (Mr Betts) said in opening the debate, the Committee’s concerns about funding for emergency accommodation should not apply to that wider provision. Short-term supported accommodation providers across Nottingham are telling me that
“the Government obviously feels it has listened and taken account of what providers have been saying.
Unfortunately though, the problem is not solved for providers like us who offer short-term supported housing. If anything, the new proposals…are worse than the previous one.”
Notwithstanding the reassurances offered by the Government in the consultation, they are leaving this sort of accommodation in a vulnerable position. Local providers do not know how the localised funds will be distributed and there is no guarantee of what will happen to them over time. They are worried that, even within a ring fence, local authorities—whose budgets are of course under extreme pressure as a result of seven years of austerity—will have to reallocate funding to align it better with their statutory obligations.
Nottingham Community Housing Association has told me that, as a landlord that operates across the east midlands region, covering several local authority areas, it is concerned about the proposal for a locally administered pot. It says that the expertise in housing is not held with upper-tier authorities, and it is worried about the correct sizing of the pot. In addition, it says that the locally administered pot is likely to be subject to different requirements in different local areas, so a landlord such as NCHA will have the apprehension of dealing with not one approach to housing costs, as in the current model, but with several different approaches across the region. NCHA is worried that the outcome will be increased costs in the management of such arrangements and potentially differing levels of housing management services procured across the region, resulting in a postcode lottery for residents.
I am sure that the Minister will agree that if unnecessary procurement and commissioning achieved poorer value for money, it would not be good. Of course, housing costs are already subject to scrutiny by housing benefit teams, the local market in respect of self-funders—particularly in the case of sheltered accommodation—and through the value for money standard, which is a significant feature of Homes and Communities Agency regulation. Adding a new level of administration to local government will increase costs without directly benefiting individuals or the public purse.
Currently, providers are able to move quickly to meet unmet housing need without having to go through local government procurement channels. As an example of that, to ease the pressures of homelessness this winter, NCHA reopened a recently closed care home as a much-needed temporary accommodation service for couples and families who are homeless in Nottingham. They did so in consultation with the city council and in a matter of weeks. Under the proposed arrangements, such flexibility could be lost. The service would need to be commissioned and funded from a pot that has potentially had its entire allocation accounted for and is therefore empty.
I will say a little bit more about some of the local services and how they will be impacted. Last year I visited the Stephanie Lodge step-down mental health service in Radford in my constituency, which provides outstanding care and support for up to 10 residents leaving in-patient psychiatric care. Again, that is an NCHA service, and NCHA is concerned that under the current proposals residents at Stephanie Lodge will lose their automatic entitlement to housing benefit or the housing element of universal credit.
Holly Dagnall, director of homes and wellbeing at NCHA, told me that
“whilst rolling up housing costs with care and support costs to be met by a locally administrated ‘pot’ might be helpful for those in our services who wish to work, the reality is that most if not all of our residents are a significant distance from the workplace, having moved to Stephanie Lodge from acute mental health in-patient services. NCHA believe that this is the only potential upside of the current proposals and that in reality this is an upside which will not be relevant to the vast majority of our residents at Stephanie Lodge.”
NCHA is anxious that
“the loss of automatic entitlement to housing costs being met for the individual means that the service is at risk of insufficient funding being made available to fund the important, statutory and legal housing management functions required to ensure that landlord duties are adequately discharged in the provision of safe and secure accommodation”
for tenants who are, as I am sure the Minister will appreciate, very vulnerable.
Short-term supported accommodation providers in Nottingham tell me that they would like to see housing costs remain within the benefits system as the housing element of universal credit, whether that is for services like Stephanie Lodge or others, where residents are likely to live for between six months and a year. They believe that that is possible to administer and provides the best assurances for both landlords and service providers, and people in receipt of the services. It will also provide housing cost assurance for new developments, meaning that providers will be able to proceed with greater confidence in providing much-needed support for vulnerable people in my constituency.
In addition to the concerns expressed to me by providers, I have been contacted by residents across Nottingham South, who have told me how living in supported accommodation has changed their lives. One former service user, Katie, who was supported by Framework—I do not know if the Minister is aware of it, but it specialises in homelessness and homelessness prevention across the east midlands—spoke of the transformation that supported housing has created for her. She said:
“I was homeless before I moved here. It was scary because I didn’t know what was going to happen. I felt powerless. I’ve been here for three or four months and it’s been great… It’s been great to have a roof over my head but it’s also taught me a lot about life.”
She explains how having to pay rent and bills for the first time has been an education and helped her to grow up and realise she could live alone in the future. Short-term supported housing is essential to help people like Katie to move on with their lives, but they also have to have somewhere to move on to within the housing system. Framework has told me that one of the reasons people cannot move on is that hostels are full and there is nowhere for people to move on to, which is creating a backlog of unmet need.
In his final budget, George Osborne announced a £100 million capital fund for the development of move-on accommodation. It later emerged that 50% of the fund was earmarked to be spent in London, leaving only £50 million for the whole of the rest of the country, even though local authorities in the midlands and the north now face greater numbers of people sleeping rough than in London, and the rate of increase is faster. Concerns have been raised with me about that programme, and indeed were raised with the Minister’s predecessor, by Andrew Redfern, the chief executive of Framework.
Andrew Redfern was told by CLG officials that the programme was likely to be launched in the autumn of 2016. While it was launched by the Mayor of London on that date, there has still been no indication of when and how the £50 million for outside London can be accessed. What is the hold-up? Can the Minister tell us today when we can expect to see that much-needed funding made available for local authorities to bid for?
My hon. Friend the Member for Nottingham North (Alex Norris) and other hon. Members have already spoken about the dangers that the Government’s proposals present to domestic violence refuges, including our own local provision. This is incredibly serious, given the pressures that we know are already in the system. Every year the refuges run by Women’s Aid Integrated Services in Nottinghamshire turn away one in 10 women due to lack of space. That is not a problem localised to Nottingham. Demand for refuge places remains sky high across the country. Nationally, 60% of referrals were declined in 2016-17. Shockingly, on just one day this year, 90 women and 94 children were turned away. Any change in funding that endangers their future is extremely worrying.
Clearly, we should do even more to support the refuges for women fleeing domestic violence. As my hon. Friend the Member for Bedford (Mohammad Yasin) said, there is the potential for devastating consequences arising from the proposals as Women’s Aid estimates that half of refuges may have to close or reduce their provision. So we have been warned. The move to a local model is deeply flawed. According to the information that I have had from local refuges, two thirds of the women flee to a refuge outside their local area, and that is backed up by what is happening. Nationally, Women’s Aid is issuing an SOS call to the Government—I know the Minister is listening—to secure a sustainable funding solution for what are literally life-saving services, and I stand with Women’s Aid in making that call.
I am pleased that locally there has been a strong commitment from both Nottingham City Council and Nottinghamshire County Council to fund our refuges. Currently, five out of the nine refuges in the county are commissioned by them. However, one refuge in the city area and three in the county receive direct DCLG funding, which runs out over the next few months. Women’s Aid Integrated Services has told me it is unclear what will happen to those four refuges. Locally, that leaves us facing the loss of 112 bed spaces accommodating 21 families at any one time. One of those four refuges is set to close at the end of March. That particular refuge is one of a small number of refuges in the country that can accommodate women with large families, women with older male children and women with complex needs for whom the usual shared refuge is not suitable. The refuge has six houses with 37 bed spaces, and the largest house can accommodate a family with up to eight children. One more Nottingham refuge that accommodates women with complex needs is also facing a very uncertain future. The loss of any beds and spaces will put intolerable pressure on the rest of the system.
Val Lunn, CEO of Nottingham Women’s Aid Integrated Services, said:
“The Government is planning a new Domestic Violence and Abuse Bill...to protect survivors”—
which we certainly welcome—
“but this is neither use nor ornament if refuges close because of the proposed changes to funding...Refuges save the lives of women and children trying to escape domestic abuse. These plans threaten to take us back to the bad old days of the 1970s.”
I know the Minister will not want us to go back to those days. I urge her to take account of the considerable concerns among providers on the front line and to work with Women’s Aid to find a solution.
The Minister’s predecessor took account of the concerns of providers and of the Select Committees’ views on long-term supported accommodation provision. I, in common with colleagues today, am raising concerns about short-term housing provision. It is time for her to listen to the experts again.
Before I call the next speaker, it might be helpful for me to say that I hope to move on to the winding-up speeches by 10 to 4 at the latest. Three speakers have indicated they would like to take part, so if they can try to keep themselves to around 10 minutes each, I will not need to impose an official time limit.
It is a pleasure to serve under your chairmanship, Sir Graham. I congratulate my right hon. Friend the Member for Birkenhead (Frank Field) and my hon. Friend the Member for Sheffield South East (Mr Betts) on securing this debate and on all the work that they have done. I welcome the new Minister to her place—a pragmatic Minister, I hear.
Housing policy is complex. It is not easy and not always universally popular. It is tricky for Governments of any colour to develop policy, but we can consider the end result in fairly simple terms. Is it the right thing to do and is it better than what went before? When it comes to the proposals for the Government’s definition of short-term supported housing, charities, users and service providers are telling me, as have Members in this Chamber and beyond, that the answer is a plain and simple no. Indeed, on the test of whether the policy will make things better, it fails in relation to housing provision and tenants’ rights, and pretty quickly it will have a knock-on effect on other services such as the NHS.
Before I explain why, I accept that there are some things that the housing providers who operate in my constituency and elsewhere welcome. They tell me that the Government have done the right thing on LHA and by recognising the higher costs of sheltered housing and extra care housing. That is to the Government’s credit. However, a Government that accept praise when they do the right thing must also listen to experts when they criticise them—constructively—too.
Housing providers tell me that the move to the defined short-term local authority grants not only has the potential to be damaging to the sector in future, but is already causing 85% of new schemes to be put on hold. Even if we accept that the local authority grants will be ring-fenced—the evidence suggests they will not—can we blame any housing association for being cautious, knowing what pressure there is on local government finances and, as my hon. Friend the Member for Nottingham North (Alex Norris) mentioned, bearing in mind the complexity of local government finances as well?
The consequences reach beyond the issue of housing numbers alone. My hon. Friend the Member for Sheffield South East referred to this. There are serious implications for tenants’ rights and the broader health and social care sector. Local authority grants do not provide the same protections and rights for those living in short-term supported housing as those living in long-term schemes. Service users will no longer enjoy the same rights as tenants. The situation is described by Riverside and Women’s Aid, who operate in my constituency and elsewhere, as a backward step. Many people who access such housing are already marginalised from society on multiple levels. Removing tenancy rights not only makes matters worse, but sends a signal that our services and our society define users as short-term problems, not as equals. On the question of whether it is the right thing to do, the answer again must surely be no.
Finally, when it comes to the test of whether the policy will make things better for services such as the NHS and social care—we have already referred to women’s refuges—yet again the answer is no. Short-term accommodation provides emergency support for those who have been through a crisis: the homeless, victims of domestic violence, people with mental ill health, and those dealing with drug and alcohol dependency. Social care, our NHS and homelessness are already at crisis point. A policy that reduces the chance of vulnerable people having a safe place to stay will only make matters worse.
In the current climate it may be unwise to predict politics. However, I fear that 12 months down the line the effects of these policies being enacted will be a topic of debate yet again, with the most vulnerable in our society paying for the consequences of a poorly shaped policy. My message to the Minister is this: no individual contributing to this debate here and beyond has every single answer to every question. But collectively, the Minister included, our housing associations, our charities and our service users have the knowledge and the ideas to develop a better approach than the one that is currently planned. Listen to what they say. It is in all our interests, so please respond pragmatically.
It is a pleasure to speak under your chairmanship, Sir Graham.
In their response to recommendation 3 of the joint report, the Government state that they are committed to boosting the supply of supported housing, but already there are supported housing schemes that have closed as a result of changes to the funding arrangements over the years. We are talking not just about supported housing for older people or disabled people. In Ipswich we had a Foyer for vulnerable young people, which was opened in 1997—one of the first fruits of a Labour Government and a Labour-run county council. The Foyer catered for up to 44 homeless young people from 16 to 24 years of age, many of them looked-after children who were no longer willing or able to live with foster parents. Those are precisely the sort of young people for whom significant investment at an early stage will make a life-changing difference.
The building was a disused warehouse, which was completely gutted and converted. It was, in effect, built for the purpose at significant capital cost. It provided accommodation in a supported setting, with 24-hour support, life training and counselling. There was also a range of training to help the young people gain employment. The provision covered money management, cookery and the search for independent housing, advice on benefits, help in getting treatment for substance abuse, and work training and voluntary work experience.
The Foyer for Ipswich now stands empty. There are substantially fewer places for homeless young people in Ipswich than there were a year ago. Circle Housing, which took over its running, said it could no longer afford to subsidise it. The county council, which is of course now Conservative-run, refused to meet the difference between the cost of provision and the amount that the Government were willing to make available. It was claimed that the young people could move into the local YMCA and that none of them would be thrown on to the streets, and it is true that that happened. However, there is an absolute shortage of places for homeless people in Ipswich and the closure of the Foyer has added to that shortage. For every young person who is in the YMCA rather than being in the Foyer, a place is no longer available in the YMCA for another young person who might have taken it.
The young people in question will not receive, at the YMCA, the support, counselling or training that the Foyer could provide. I do not believe that the Government response to the joint report recognises what flexibility is needed in the range of funding required for vulnerable people with such a wide range of needs. A substantial level of funding administered through local government would provide that flexibility but also entail a range of expectations for the councils to be held to, as well as requiring a regime of local government funding that would not force councils to pick and choose which statutory duty they could afford to take more seriously than another.
The alternative—possibly a more achievable one—is to plan a national network of hostels for homeless young people in need of additional support, as has been proposed for women’s refuges. The Minister should bear in mind that enough funding is needed, but also that it should be provided in such a way that there can be a full range of provision—not just the least expensive form—and securely enough to create the confidence necessary to plan for that full range of provision.
So long as supported housing facilities such as the Foyer for Ipswich continue to close, the Minister can be sure that the Government have not got things right.
It is a pleasure to serve under your chairmanship, Sir Graham. I declare an interest as a current member of Gateshead Council. I am a member of the Communities and Local Government Committee. I was not a member when the report was produced, but I was when we considered the Government’s response. Before I came to this place, I was a housing portfolio holder, so I tracked the issue with great interest.
I want to raise several matters. First, it was good to hear that the Government are not pursuing the local housing allowance in relation to supported housing and social housing generally. That removed a good deal of uncertainty from a huge proportion of our sheltered housing stock—about 71% of stock—so it was a positive move, although we still need to see what comes out of the proposals on sheltered housing rent. My thanks are not unqualified, therefore, but the move was welcome.
Secondly, on the provisions for short-term and transitional housing, as other colleagues have said, the Joint Committee’s report discussed very short-term and emergency accommodation. The situation seems unclear; I was going to say it mixes apples and pears, but perhaps it is more like mixing apples and lemons, because of the wide range of diverse provision covering different needs, which might involve different funding elements and methods of funding. Members have identified many issues and I will not go over them all. However, there has been mention of funding for schemes of up to two years. Given the different groups that use the accommodation, from homeless people with an urgent and immediate need to people facing drug and alcohol rehabilitation following a crisis, there are different needs that should be taken into account.
The issues that are thrown up have already been referred to by housing associations and other organisations. From the providers’ point of view there is continued uncertainty as to funding of the relevant part of the market, and they feel that that will stifle development. Hon. Members have referred to the desperate need for increased provision for such supported housing across a wide range of groups. We know that the uncertainty has already stifled development, because of the local housing allowance debate and the wait for a decision. We cannot afford further delays in the provision of additional accommodation of the kind in question. There is concern that local authority contracts may be as short as three to five years, and that all the uncertainty, along with the fear that funds that may be ring-fenced to begin with may not be permanently ring-fenced, will create a problem and stifle the development of new schemes. It is a practical problem.
The impact on people—tenants—has also been mentioned. They will not get the same benefits in relation to tenancies as they may have got previously, and will be subject to a different regime.
As I have said, we know that the local housing allowance consultation stifled development, and we cannot afford for that to happen again. Organisations that have been mentioned in the debate, such as Riverside, the YMCA, St Mungo’s and the Salvation Army, have clearly pointed out the problems in briefings that they have circulated. I have no doubt that they have presented them to the Government as part of their response. I hope that the Government will listen to their comments and think again. I know that a number of organisations have suggested alternative funding models for the future.
Many hon. Members have referred to domestic violence, and we have heard that the proposed funding model will limit access to appropriate provision for women fleeing domestic violence. Already we know that the number of places in refuges has been reduced, and we have heard practical examples of that.
We need a funding mechanism that works—and that works for women and those fleeing domestic violence—and that ensures that no woman is turned away from a refuge when she needs it. We also need a mechanism that does not impose local authority boundaries when people may need to cross those boundaries to ensure their safety and security, and that of their family. I ask the Minister and the Government to look again at a national scheme that allows for that freedom and that ensures that those services are there. I hope the Minister will take these points on board—they are clearly shared by Members from all parties that have been represented here—and seek to provide practical and positive solutions to these very real issues.
It is a delight to see you in the Chair, Sir Graham. I start by congratulating the Minister on her promotion; very best wishes from a current Whip to a former Whip. The Ministry of Housing, Communities and Local Government’s gain is the usual channels’ loss.
I commend the Committees on this excellent report. My hon. Friend the Member for Glasgow Central (Alison Thewliss) participated in the inquiry during her time as a member of the Communities and Local Government Committee. I know that she is very sad not to be on that Committee anymore; she has since been lumbered with me on the Procedure Committee, which is incredibly exciting. I am conscious that it is a Thursday afternoon, so I will not seek to detain the House for very long.
I pay tribute to and thank the 13 Back Benchers who spoke for their very good speeches. They include the right hon. Members for Birkenhead (Frank Field) and Knowsley (Mr Howarth), and the hon. Members for Sheffield South East (Mr Betts), for Gloucester (Richard Graham), for Dulwich and West Norwood (Helen Hayes), for Bridgend (Mrs Moon), for Waveney (Peter Aldous), for Bedford (Mohammad Yasin), for Nottingham North (Alex Norris), for Nottingham South (Lilian Greenwood), for Weaver Vale (Mike Amesbury), for Ipswich (Sandy Martin) and for Blaydon (Liz Twist). It has been a fairly consensual debate.
I have to say that, as a Scottish MP, I approach the issue with the view that the UK Government must ensure that their plans work for people across the UK, taking into account the specific needs of Scotland. We in the Scottish National party welcomed the UK Government’s climbdown on applying the local housing allowance to the social housing sector, which includes supported housing. I am sure that I speak for all right hon. and hon. Members in saying that the supported housing sector does amazing work supporting some of the most vulnerable people in our society, particularly as they seek to live independently.
The new funding model for short-term supported housing proposes devolving funding to Scotland from 2020, and it is therefore vital that the future funding model works for the people of Scotland. The report makes some sound suggestions for the future of supported housing, but I also very much hope that the UK Government will ensure that they consider the views of key stakeholders.
I have already mentioned my party’s welcome for the climbdown on the application of LHA to social housing. That announcement is positive because it comes as a major relief to renters in the social sector, as well as to supported housing providers. I pay particular tribute to my friend and colleague in the Scottish Government, Kevin Stewart MSP, who wrote, jointly with the Convention of the Scottish Local Authorities, to the Department for Work and Pensions to call for that reverse in policy.
Imposing the LHA on the social rented sector would have a devastating impact. Research carried out by the Chartered Institute of Housing found that the total rent shortfall for single under-35s alone caused by the shared accommodation rate could be £8.6 million a year. The sector has done fantastic work in campaigning against this cut and informing and lobbying Her Majesty’s Government about the major damage that it would cause to renters and providers.
It is concerning that the Government made that announcement only because they were forced to answer to the House on supported housing. Other Members have outlined how that prolonged the agony of the sector, which has faced potential disinvestment because of the uncertainty. The delay in announcing this has certainly caused undue stress to the sector and to tenants, many of whom may already be in psychologically stressful situations. It was unhelpful that the Government buried this announcement in the chaos of Prime Minister’s Question Time; it was disrespectful to those in the sector who had been waiting for clarity and had been under the impression for more than a year that their funding would be cut.
The sector saves the Government in the region of £3.5 billion per year through lower costs for the national health service and the social care and criminal justice systems. The National Housing Federation told the Work and Pensions Committee that, for older tenants, the annual saving to the taxpayer due to their reduced reliance on health and social care services was an estimated £3,000 per person, while for people with learning disabilities and mental health issues the saving was between £12,500 and £15,500. The Associated Retirement Community Operators told the Committee that people in extra care housing cost the NHS 38% less than the average population in general needs accommodation.
As I mentioned before, funding for short-term supported housing will be devolved to Scotland from April 2020 at a level equivalent to that which would otherwise have been available through the welfare system. In England, the model set out in the consultation means that this provision will be commissioned at a local level, funded through a ring-fenced grant and underpinned by a new local planning and oversight regime.
However, in Scotland we wish to work with local government and providers to consider that option alongside a broader range of potential options for distributing the funds with the wider sector over the coming months. To ensure that the amount of money devolved meets the needs of the sector, we will work with the UK Government, providers and local authorities to ensure that the data gathered on existing costs is robust and enables service users to continue to be supported.
Long-term supported housing will remain in the welfare system, and I am glad that the UK Government have committed to working with the sector to develop and deliver arrangements to ensure value for money. However, DWP officials have indicated that they still need to work to find a longer-term practical solution to keep that money within the welfare system due to the move to universal credit by 2022. It would be remiss of me at this point not to reference universal credit and its forthcoming December roll-out in Glasgow. I continue to ask the Government to halt that roll-out, given the shambles we have seen with it elsewhere.
It is vital that the future funding model works for the people of Glasgow and of Scotland. Although responsibility for housing is devolved, the UK Government’s policy on housing support has a substantial impact on Scotland’s pursuit of its housing objectives. I know that my colleagues in the Scottish Government are responding to the UK Government consultation on this, which I understand closes on Tuesday.
The report makes some sound suggestions, and I very much hope that the Government will consider the views of stakeholders. I have to say that, as a new MP, I continue to be somewhat frustrated that the Government continue to tie themselves in knots over Brexit, often at the expense of other policy areas. The fact is that their delays are having a very real impact on people—in this case, vulnerable people living on low incomes.
The burden of the Government’s policies continues to fall on other parts of the public and voluntary sectors. The UK Government must provide certainty for the social housing sector and bring forward their plans for a robust funding formula. I am conscious of time, so I conclude by saying that the report—as well as the consultation currently being held—should be considered as an opportunity genuinely to listen to the view of the community who know best about how to put this type of housing on a sustainable footing.
It is a pleasure to serve under your chairmanship, Sir Graham. I join others in the House in welcoming the Minister to her place. I look forward to working with her in the future. I also add my congratulations to my right hon. Friend the Member for Birkenhead (Frank Field), who is not in his place, and my hon. Friend the Member for Sheffield South East (Mr Betts) on securing the debate on the excellent joint Select Committee report. I am sure it will be referenced for some time to come.
I suspect that it will not come as a surprise to some in the room to hear that I think the report is excellent, given that I was a member of the Communities and Local Government Committee. In that vein, I extend my thanks to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham), who is no longer in his place, who steered that Committee through some intensive evidence gathering sessions with their excellent chairing skills. They made possible a thorough report that enabled those different organisations and Members of Parliament to challenge this policy and have some great effect.
I also remember the work of the hon. Member for Waveney (Peter Aldous) in this area. It became apparent towards the end of last year, when he held a very short debate in the House, just how much concern about and affection for supported accommodation there is across the House. There was barely a seat available for people to listen to his eloquent words. It was profound, and it certainly made clear to Ministers the strength of feeling across the House on this matter.
The joint Committee report, alongside the repeated calls from the Opposition in Opposition day debates and the resolution of the House, resulted in a welcome acknowledgment by the Government that including supported housing in the LHA rate cap was wrong and in a climbdown by the Prime Minister. However, the resulting review of the funding model has left things less than straightforward—that is quite a generous description of the situation.
It has been striking to hear the similarities between the issues raised by hon. Members and the collective approach taken by providers of supported accommodation. They have been determined to speak with one voice and ensure that they are heard collectively, so that the Minister understands that some very clear flaws need addressing. Doing so will hopefully reduce her considerable burden of additional responsibilities.
My hon. Friend the Member for Ipswich (Sandy Martin) was right to highlight all the other services that are available within supported accommodation. This is not about a roof over people’s heads. It is about the accommodation, but it is also about the support. We should remember that in every decision we make.
The Government plan to split their supported housing funding into three models, based on sheltered, short-term and long-term needs, and move the responsibility for funding of short-term supported housing from the main welfare system to local authorities. The Government have said that that is about providing long-term sustainable funding mechanisms that ensure quality. However, I do not think that the Government’s response goes anywhere near achieving those aims. In fact, as it stands, the proposal will lead to more insecurity for many around the country, as my hon. Friend the Member for Blaydon (Liz Twist) explained clearly.
Despite repeated attempts, before the hon. Member for South Derbyshire (Mrs Wheeler) took her place as Minister, to entice Housing Ministers into confirming the details of future funding, there has been no movement beyond the 2020-21 commitment, but we know that the Treasury has set aside around £500 million for 2021-22. Perhaps the Minister will be rather less coy than her predecessors and end this cloaked performance, so that we can give clarity not only to the sector that provides these vital supported services but to the people who use them.
It has to be recognised that living in supported housing is not a choice. People go into supported housing out of necessity, because they have no other options available to them. I urge the Minister to be clear today and tell those people that there will be no cut in funding in the second year and no cut in funding in subsequent years. To fail again to provide certainty to this sector will only add to the delays in investment that the joint Committee report has shown are already happening.
The long-term impact of the delays will most likely be that the standards of accommodation will be lower, as the costs outstrip the benefits of ever-increasing and more demanding maintenance, and that fewer places will be available because new, more suitable accommodation will not be built. The Minister will be well aware from the contributions today that significant concerns remain about the moving of funding away from the welfare system to local authorities, meaning that funding will no longer be needs-led and no longer based on the right to help with housing costs for individuals. Nobody wants to see further financial risk burdens given to local authorities, which are already hard-pressed.
As has been mentioned—particularly by my hon. Friend the Member for Nottingham North (Alex Norris), who has been a champion of this issue—charities such as Women’s Aid have raised concerns that these reforms are incompatible with the way the national network of refuges operates around the country. As many Members have said, two thirds of women travel outside their local authority boundaries to seek refuge care. Indeed, on my last visit to my local refuge just before Christmas—it is run by the excellent Denise Farman, who works tirelessly for the women who seek her assistance there—I met women from right across the Yorkshire and Humber region. I know that previously they have come from much further afield as well. Funding based on local need simply does not make sense. The Government must commit to work with refuge providers to redesign a funding model that represents the reality of refuges.
The definition of short-term accommodation as being for up to two years, which my right hon. Friend the Member for Knowsley (Mr Howarth) mentioned before he had to leave, causes serious problems for the sector. The charity Rethink Mental Illness has said that these new funding levels will make mental health supported housing more insecure and result in fewer new supported housing services and more scale-backs or closures of current supported housing. Many of the cases that it deals with will now be classed as short term. Indeed, 50% of its supported housing services will now be classed as short term and subject to the new funding model.
We have to remember that the people in this accommodation have a range of conditions, with differences in severity and longevity and therefore very different timelines for moving out of supported housing. Does the Minister recognise the additional anxiety and stress that will be caused by adding this new ticking clock if those people are placed in what the Government term short-term accommodation? The Government must give serious thought to the views of groups such as Rethink Mental Illness and cutting the length of time that is considered short term. Let us accept that “short-term” is genuinely short. There seems to be a consensus across the House and throughout the supported accommodation sector that it takes 12 weeks to deal with emergency supported housing need, as well as universal credit and access to housing benefit.
Part of the logic in making these changes is the incompatibility of universal credit with extremely short-term supported housing. Surely if the aim of universal credit is to encourage claimants to be independent by allowing them to manage their own housing costs, this proposal for short-term supported housing goes against the very principle of universal credit. My hon. Friend the Member for Sheffield South East made that point far more clearly than I just managed to.
Groups such as Riverside, the YMCA, St Mungo’s and the Salvation Army—the Salvation Army rarely comes out against any Government to suggest that things are not going well—have all said that managing housing costs in a supportive environment is a vital step in the transition to independent living for those in short-term supported housing, so removing this independence could lead to longer stays in supported housing. Rather than creating a new, complicated and crudely structured system, surely the Government should look at how the universal credit system could be improved for those in short-term supported housing.
My hon. Friend the Member for Nottingham South (Lilian Greenwood) mentioned the lack of move-on accommodation for people who wish to leave short-term supported accommodation. She is absolutely right about that. I was interested to learn about the additional £50 million allocated for homelessness outside of London. It is obvious to everybody that there is an increase in visible homelessness and rough sleeping outside of London. Where is the funding that was earmarked for that? When will it be allocated?
I thank my hon. Friend the Member for Weaver Vale (Mike Amesbury) for raising the issue of tenancy security. If people are not to be treated as individuals or have any of the tenants’ rights that they may well have relied on previously, with the money going to the organisation instead, we add the pressure of a lack of housing security. That is not something we should be encouraging within the supported accommodation sector.
I have a few more questions, which are in line with some of the questions posed by my hon. Friend the Member for Sheffield South East. What happens if a service does not receive a grant? My hon. Friend the Member for Dulwich and West Norwood referred to what might be considered less desirable accommodation—for ex-offenders, for example—which local authorities might not always be desperate to see more of in their area. Can the residents receive housing benefit? If a service has a grant for some but not all residents, can some still receive housing benefit? What will the Minister do to ensure that organisations that do not currently deal with local authorities and do not receive, for example, Supporting People funding do not fall through the gaps in the new system?
In a statement to the House in December, the then Housing Minister, the hon. Member for Nuneaton (Mr Jones), said that he was
“confident that by working with the sector we can get this right.”—[Official Report, 21 December 2017; Vol. 633, c. 1317.]
But here we are, with significant representations from across the sector saying that this is not right. I urge the Government to recognise that the proposal is simply not working and quickly to develop a fit-for-purpose model that represents the reality of supported housing. The conclusion next week of the consultation gives the new Minister a perfect opportunity to take those necessary steps.
It is an absolute pleasure to serve under your chairmanship, Sir Graham. I thank everyone for their contribution; this has been a very wide-ranging conversation. I congratulate the right hon. Member for Birkenhead (Frank Field) and the hon. Member for Sheffield South East (Mr Betts) on securing this incredibly important debate on supported housing and on the work done on the issue by their Committees and, in particular, the Joint Committee.
May I start by saying how pleased I am to have been appointed the Minister responsible for housing and homelessness? I declare an interest, as my husband is a councillor on my local council, South Derbyshire District Council. I also extend my heartfelt thanks to my hon. Friend the Member for Nuneaton (Mr Jones) for his work on this very important issue, and wish him well in his new role.
Working towards a fair and equitable society is a priority for this Government and will be my priority. Supported housing plays a critical role in that. I know that from my own area, which has an excellent domestic abuse refuge, a wonderful older people’s housing village and specialist move-on accommodation for young people. We embrace such housing in South Derbyshire, and I am sure that many other places around the country do as well.
I am sure we all agree that supported housing is an invaluable lifeline for some of the most vulnerable people in our society. It helps many people to lead independent lives or to turn their lives around, and is a vital service for a country that works for all. Across England, more than 700,000 people live in supported housing at any one time. They range from vulnerable older people to individuals with learning disabilities and physical impairments, those at risk of domestic abuse, people who are homeless and many others. It is also an investment that brings savings to other parts of the public sector, such as health and social care.
It is imperative that we continue to support the most vulnerable in society and, as the Joint Committee identified, that we have a sustainable supported housing sector that is fit for the future. I am committed to ensuring that the funding model that underpins supported housing protects and boosts supply, and that it delivers positive outcomes and a good quality of life for those who depend on it.
As hon. Members will be aware, we published the “Funding Supported Housing” policy statement on 31 October. We have worked closely with providers of supported housing on our proposals and continue to do so. The recommendations made by the Communities and Local Government and Work and Pensions Committees were especially important to that. Our new funding approach has real benefits, many of which, I am pleased to confirm, align with the Joint Committee’s report. I remind hon. Members that we confirmed in the policy statement that we would not apply local housing allowance rates to tenants in supported housing or the wider social rented sector. In line with the Committee’s recommendation, we also announced that we would introduce the new approach from April 2020, rather than April 2019. That will ensure that vital support provided to vulnerable people is not interrupted or put in doubt, and that local government has time to implement the reforms. The Government remain committed to boosting the supply of supported housing—I am delighted to say that a second time.
Our announced model can be considered to meet different people’s needs in three respects. First, we will introduce a sheltered rent, for sheltered housing, within the welfare system. I am pleased to say that that is akin to the supported housing allowance recommended by the Committee. It is a type of social rent that will cap the amount that sheltered providers can charge for gross rent, including eligible service charges. We will work closely with the sector to set the limits at an appropriate level and, more generally, to protect provision and new supply. We will bring in existing supply at existing levels of rent and service charges. Again, we are ensuring that the service is there, at the right level.
Secondly, we said that long-term supported housing, such as permanent housing for people with learning or physical disabilities or long-term mental ill health, would remain in the welfare system. We will work with the sector to develop greater cost control. That is important; the public would expect us to do that.
Thirdly, we have taken on board the Select Committees’ recommendation that there should be a locally administered grant system for short-term accommodation. That will be introduced from April 2020. All short-term provision—for example, hostels and women’s refuges—currently funded by the welfare system will continue to be funded at the same level by local authorities in 2020.
I think that there is a misunderstanding—shall I put it that way, Sir Graham? The Government have not taken on board the Select Committees’ recommendation, because the term “short term” has been moved. The recommendation actually talks about a mechanism for “very short-term accommodation”, the “emergency nature” of that provision and links to universal credit. That is not what the Government now propose.
I thank the hon. Gentleman for that intervention. I am happy to give him clarity and succour. The short-term supported housing will be funded at current levels in 2020-21 through the ring-fenced local grant funding, and funding will continue to take account of the costs of provision and projected future need. I have to state the obvious: budgets are not set for years beyond spending review settlements. Housing costs will be funded directly by local authorities through the ring-fenced grant. I know that the sector has concerns about the longevity of the ring fence, so I want to reiterate that we are committed to retaining that for the long term, as the Joint Committee also recommended.
On the point about the longevity of the ring fence, the Minister must surely recognise that the ring fence is only as secure as the Government of the day’s commitment to it. Even if the ring fence is somehow established in legislation, it can be overturned at the will of a subsequent Government. Could she please address the point, which is of grave concern across the sector, that a ring fence is not a secure way of assuring long-term funding for the sector?
I thank the hon. Lady for that intervention. I must stress again that no Government will put in place anything beyond a spending review period. It is not right or proper to do so. That is normal business.
I thank the Minister for giving way again, but she simply makes the point that the ring fence provides no long-term assurance to the sector. Does she agree that it is inherently a short to medium-term measure, and that the sector cannot therefore be guaranteed that the ring fence will be there for the long term, as she indicates is her intention?
I am afraid that the hon. Lady misunderstands me, because the long term will be ring-fenced with local authorities. The whole point about this is that we want to grow the supply of sheltered and supported housing accommodation, because the Government consider it very important in looking after the most vulnerable people in society in future. In the same vein, I reassure hon. Members that the amount of grant funding for this part of the sector to 2020 will continue to take account of the costs of provision, and growth of future provision.
Better oversight and value for money are an important part of our reforms. The Joint Committee was keen that there should be a set of national standards. We are consulting on a national statement of expectation, which will set out what we want good supported housing to look like.
We will work with local government on how it plans future provision in England as it assesses current and future need. Before implementation, we will issue more detailed guidance, to support local authorities in monitoring this provision in their area. We are carrying out a full new burdens assessment to identify how much additional administrative budget local authorities will need to deliver the new funding approach. We are working closely with local authorities and the Local Government Association to do that.
Under the short-term model, all funded provision will be commissioned by the local authority. This means providers will need to meet local authority quality standards. Furthermore, under the new model for sheltered and extra care, the social housing regulator will monitor compliance with this new system. We are empowering tenants by obliging providers to publish breakdowns of their service charges. Where tenants feel that these are unreasonable, they can take action. We also continue to work with the sector to identify ways to drive up standards, improve outcomes and share best practice.
I have mentioned a number of areas where our conclusions coincide with those of the Committee, but one recommendation on which we are not aligned is that on the creation of a bespoke model for refuges. We recognise how important that is, but we believe that a local approach will ensure the best outcome for domestic abuse services. This is because local authorities are best placed to understand their residents’ needs.
Does the Minister not accept the statistic, provided by Women’s Aid, that two thirds of women come from outside their local authority area?
From my experience, I know that many people move around and prefer to go to a refuge that is not next door. There is then a knock-on effect: that local authority takes on local housing, unless they later find somewhere else that the person in the refuge wants to go to. The effect of this is that all the way around the country, local authorities take their fair share, and they know that and work on that basis.
The Minister paints a picture of all constituencies having similar socioeconomic backgrounds, but women’s refuges are not evenly distributed; nor are hostels for young people or those with substance abuse issues. The Minister will probably find that the majority of such buildings and such provision is in urban areas. Rural parts of the country often rely on the provision in urban areas, yet do not financially contribute to it.
Without prolonging the conversation, I think the hon. Gentleman will find that certain areas in the west country have gone for an alternative model of safe houses and havens. It is not that there are not places for people to go; it is just done in a different way.
Our approach frees vulnerable women from meeting house costs themselves. It empowers them to focus on what matters most in repairing their life. However, I am aware that the quality of service varies significantly. This is why we are conducting a thorough review of domestic abuse services. Many of you, have an interest in this, as do I. I ask that you encourage your local authorities, service providers and others to engage fully in the review. It will report to Ministers—that is, to me—this summer. I look forward to receiving those submissions and going through them personally. My hon. Friends Marcus Jones and Caroline Dinenage met several supported housing providers and representatives, as did Lord Best, Lilian Greenwood, Jess Phillips and Victoria Atkins, following the announcement of the funding model. Naturally, I look forward to continuing this engagement, and listening to and working with the sector.
I very much appreciate the time and work that Select Committee members have put into the “Future of supported housing” inquiry. I also value the opportunity to attend this debate and hear further views on the funding model. I am confident that our new proposals will offer certainty to providers, so that they can invest in new supply, particularly of sheltered and extra care housing, where demand is expected to grow. As was mentioned, Home Group has given the green light to funding for new supported housing schemes—a £50 million scheme is not a small scheme. However, we know that there is work left to do to achieve the best outcomes for the many who live in supported housing.
I want to thank the Joint Committee for its inquiry. There were so many areas of future work that we can agree on.
I am grateful to the Minister for summing up. The consultation finishes next week. Will she confirm that, in line with the previous consultation, her Department will listen very carefully and reflect on the proposals from providers? Will she also say on what sort of timetable she envisages her Department providing a response to that consultation?
Absolutely. Thank you: you have given me a great opportunity to mention one more thing. We have stressed so often today, and in the Government’s official response to the inquiry paper, that the consultation, which finishes next week, on Tuesday 23 January, gives us a real opportunity to go through everything for the summer. We will then be able to report back, but I am sure that there will be an opportunity to nail this much more quickly than that.
Again, I thank the Joint Committee for its inquiry. We agree on so many areas. I look forward to working with it on tweaks to make things safer across the whole country. I look forward to working with the devolved Administrations as well.
This has been a wide-ranging, well informed debate. It is a great credit to my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes) and the hon. Member for Gloucester (Richard Graham) that they produced a report that not only commanded the complete support of two Select Committees, but has wider support across the House and outside it, among providers and others. That has been absolutely clear.
At the beginning, I asked the Minister to address three fundamental issues. There is still a bit more work to do on how the cost controls over longer-term housing will be applied, and I am sure that we will continue to explore that. We have a difference on women’s refuges. It is not so much a matter of people choosing to go outside the area; they are often forced outside the area to a place where they have no local connection. That issue needs to be addressed nationally, and we need further discussion and debate on those matters of concern.
I come back to the issue of short-term accommodation. As I said, I had a briefing from St Mungo’s this morning and a phone call with Riverside, which has produced a joint briefing with the YMCA and the Salvation Army. The hon. Member for Waveney rightly (Peter Aldous) read out an even longer list of providers with concerns—a very long list. The Government have generally misunderstood or misinterpreted—at this stage I will say unintentionally—the recommendation about emergency accommodation. The words in the report were “very short-term accommodation”, but the Government have applied that to all accommodation of less than two years, which is not right and not what the recommendation actually states. The National Housing Federation has been talking to all its members and puts the matter succinctly:
“The definition of short-term services in the consultation paper is very wide and this should be tightened so that it is clear that the local system covers short-term emergency accommodation where people stay for a period of weeks rather than months.”
Were the Government to say, “We’re changing the definition so that accommodation funded through the benefit system is extended to include all accommodation, except that for very short-term emergencies of up to 12 weeks, and that very short-term emergency accommodation will be funded through the ring-fenced grant”, we would give fairly unanimous support straightaway. I ask the Minister to go back and look again at that particular issue. It is of real concern to providers, and I think that the Government have simply got it wrong. There is no reason to take accommodation of a year, 18 months or even six months out of the welfare system. Short-term emergency accommodation should be the only accommodation funded by the ring-fenced grant. If the Minister would at least listen to that, take it away and consider it, and perhaps make the change, we could get a much better funding system.
I thank the hon. Gentleman for that, and am very glad he is putting that on the record, because it is important that we all talk about the same thing. We listened carefully to the views of the sector in the previous consultation and through the sector task and finish groups, which said that on balance, this timeframe reflects the nature of support provided and an individual’s journey and outcomes. We are, however, absolutely clear that we continue to listen, and will consider feedback in the current consultation. I hope that puts his mind at rest.
It is helpful that the Minister is still listening. I obviously do not know who is on the task and finish group, but I do know the number of providers that are clearly raising concerns; the National Housing Federation encapsulated in one sentence, which I read out. If the Minister listens to that, reflects and makes the change that has been suggested, we will have a much better system—a system that the providers, in the widest sense, will be happy with, and that will encourage the new investment that we all want.
Before I put the question, I remind all Members that colleagues should be referred to not by name, but by constituency, and that they should be addressed in the third person. I did not want to break anybody’s flow during their speech, but I hope that is helpful.
Question put and agreed to.
That this House has considered the First Joint Report of the Work and Pensions Committee and the Communities and Local Government Committee, Future of supported housing, HC 867, Session 2016-17, and the Government response, Cm 9522.