We started off these discussions by referring to the conflicting interests between the affordability for the residents of supported accommodation and the financial sustainability of the provider.
Providers of supported housing services have essentially two different types of costs:
· Housing costs
· Support costs
Housing costs are paid through the welfare system. Providers who provide care, support or supervision to their residents can apply for Exempt Accommodation Status. Their housing benefit payments are not capped by the Local Housing Authority rates. Instead they fall under the old rules for Housing Benefit which are cost based and have specific rules surrounding what can and what cannot be claimed. The interpretation of these rules falls to the discretion of the Local Authority and differs substantially. In our experience some local authorities specifically exclude the cost of assisting the tenants to maintain their tenancy whilst others are happy to include it within those costs. This helps to reduce down the support costs of the organisation in favour of the housing costs.
Support services are either commissioned and paid for by the local authority under the funding that used be ‘Supporting People’, paid for directly by the tenants or recovered elsewhere through fundraising and marketing. It is often a combination of the above. There is definitely an incentive for any organisation to shift some of their support costs to the housing costs as this paid for under welfare. Providers are effectively continually seeking to find ways to maximise the amount that can be claimed under either welfare or commissioned services in order to achieve financial sustainability for the organisation. But what about the financial sustainability of the tenant?
From a tenant’s perspective, whilst on benefits the rent is less relevant because they don’t pay it. They are however affected by the service charges. Some providers seek to maximise the income from tenant charges. We are aware of one national provider whose tenant charges account for nearly 25% of the cost of the support that is being provided. We spoke to another local provider recently who was asking us to consider a referral for a former tenant of theirs who was street homeless as a result of failing to pay their service charges. In our view, unreasonable service charges place an unwelcome burden on already vulnerable tenants. To then evict them because they are not keeping up with these payments seems to be equally unfair and unreasonable.
When a tenant finds work, the question of affordability becomes an immediate concern. Rents are often unaffordable for a working tenant in supported accommodation. They are more or less obliged to or even encouraged to move out when they find work.
In a system where recovering the maximum of costs possible through the rents and service charges is the norm, there is no room for a person-centred approach. The needs of the organisation dictate that the bed-space should be filled by someone who can afford to pay. They are much better off filling the bed-space with someone who is on benefits rather than someone who is working. It seems to us that the needs of the tenant are often deemed to be irrelevant. This is counter-productive when the whole point of the service is meant to be for the beneficiaries.
It would not be a problem where there is sufficient provision of proper move-on accommodation since the tenant could be encouraged to move-on rather than being forced out!
The issue with move-on accommodation is that the rent has to be capped at around £100 a week if we are to go by Shelter’s recommendation. Service charges also have to be kept low to make the accommodation sustainable and affordable. Costs cannot be passed on to the tenant and have to be found elsewhere. In a day and age of austerity where funding for homelessness is being decimated and costs are rising, this places an additional financial burden on organisations that are already struggling to meet demand and remain financially viable.
Homeless link did a survey called "Who is Supporting People now?" on the impact of the removal of ‘Supported People’ funding on the sector and found that in order to reduce costs providers were increasing the working hours of their support staff, reducing down salaries and providing no possible career progression as well as cutting services. Providers of traditional supported accommodation are already struggling financially to cope with the budget cuts and having to seek to find ways to adapt. Why would they go and impose upon themselves a financial model that is even more restrictive?
Bearing all of this in mind, we come back to the question that has arisen here in Wolverhampton of how to incentivise more provision of move-on accommodation whilst reducing down the quantity of supported accommodation. It is not in the interest of providers to make the shift to a more tenant-centred approach. Yet without such changes to the system, tenants remain trapped in cycles of housing poverty that are not providing them with a way out that is sustainable, affordable and will prevent them from falling back below the housing line again in the future. Despite the inherent difficulties of operating differently some providers are seeking to put the needs of the tenants first in order to provide long-term solutions.