Enhanced Housing Benefit, the Exempt Accommodation Project and the Oversight of Supported Housing

Introduction

Some months ago, I wrote a briefing on the oversight of supported housing. Since then, much has happened in the supported housing space, including the National Statement of Expectations for Supported Housing and consequential structural changes at local authority level. These changes include more integrated “commissioning” of supported housing, often in conjunction with Revenues and Benefits departments, as local authorities consider how to manage the supported housing “market”.

Enhanced Housing Benefit and the Exempt Accommodation Rules

We have seen additional restrictions on, and greater scrutiny of enhanced Housing Benefit claims made by supported housing providers under the Exempt Accommodation rules.

Back in October 2020 I wrote a briefing on the National Statement of Expectations for Supported Housing in which I expressed concern that it would be used as an exercise in cost control. Unfortunately, those fears seem to be justified in many instances. Some local authorities are trying to insist on supported housing providers becoming registered providers to qualify for framework agreements and tenders in circumstances where, in England at least, this is a very difficult thing to do.

Other local authorities are restricting enhanced Housing Benefit payments to non-registered supported housing providers to artificial local maxima of less than they need and are entitled to. They do this to avoid the subsidy loss they incur when they pay enhanced Housing Benefit to non-registered supported housing providers. This is understandable in a way, but it further reinforces the three-tier system in which a tenant’s entitlement to enhanced Housing Benefit is dependent on the legal identity of their landlord, which is patently bonkers as well as discriminatory:

• Private supported housing landlord: Local Housing Allowance levels only
• Nonregistered supported housing provider landlord: reduced levels of enhanced Housing Benefit
• Registered provider supported housing landlord: full enhanced Housing Benefit

We actually need to get rid of the Exempt Accommodation rules and move to a supported housing rent based on an unrestricted Universal Credit housing component. This should be irrespective of the legal identity of the supported housing provider.

The Exempt Accommodation Project

Whilst we are stuck with the Exempt Accommodation rules, we’ve developed the exempt accommodation project in order to:

• Stop financial discrimination based on the legal identity of a supported housing landlord
• Enable local authorities to fully recover the enhanced Housing Benefit they pay
• Ensure full regulatory compliance through the optional use of the ClouDigs cloud-based supported housing management system (it’s effectively free, so why not?)
• Ensure that supported housing providers are of good quality and only operate with the consent of local statutory sector partners

The Exempt Accommodation Project works by connecting non-registered supported housing providers that own or lease their properties with smaller, community-based registered providers that then take a legal interest in the properties concerned. This enables the payment of enhanced Housing Benefit, which the local authority can fully recover. We provide all the necessary documentary infrastructure and regulatory compliance systems, and we calculate and secure the enhanced Housing Benefit. It effectively costs nothing as the small costs involved are Housing Benefit eligible.

Exempt Accommodation Project Flowchart

Please get in touch if you want to be part of the Exempt Accommodation Project, if you’re:

• a supported housing provider, irrespective of legal identity, looking for enhanced Housing Benefit
• a registered provider needing an additional revenue stream within a risk-managed structure
• a local authority wanting a strategic approach to full subsidy recovery on enhanced Housing Benefit payments, and the effective management of the local supported housing market.

The Exempt Accommodation Project will not accommodate supported housing providers that are not welcome by the local authority within which they seek to operate. We conduct extensive due diligence on ALL supported housing providers (and registered providers) asking to be involved in the Exempt Accommodation Project. The first consideration the due diligence process is whether the supported housing provider in particular is “approved” by the local authority.

The Accreditation and Oversight of Supported Housing

It would be much simpler if supported housing providers were accredited by local authorities (not regulated or overseen, more on that in a minute). Why not simply refresh the old Supporting People accreditation framework? This would prevent the ill motivated people who set up poor quality supported housing providers and dubious registered providers as a moneymaking exercise from being able to claim enhanced Housing Benefit. Unaccredited providers should not be eligible to claim enhanced Housing Benefit. Thea Raisebeck’s “Exempt from Responsibility?” Report is an insight into the dangers of unaccredited providers.

The National Statement of Expectations requires local authorities to manage their local supported housing “market”, including supported housing services that they don’t fund, so-called non-commissioned services.

I think we need to clarify what we mean when we talk about “commissioned” and “non-commissioned” services. Both the National Statement of Expectation for Supported Housing and the abuse of the enhanced Housing Benefit system require us to do so.

In my view supported housing services should not be eligible for enhanced Housing Benefit or other funding unless they operate at the behest or with the approval of the local authority and its strategic partners.

Local authorities should actually accredit supported housing providers, whether or not they do so in a formal way. In this sense all enhanced Housing Benefit eligible supported housing services would effectively be “commissioned”. Commissioned with a capital C if they are recipients of local authority or other statutory funding aside from enhanced Housing Benefit and commissioned with a small c if they receive enhanced Housing Benefit only. The point is that the latter, which are erroneously referred to as “non-commissioned services”, should only be paid enhanced Housing Benefit if they operate at the behest of or with the approval of local authorities and are accredited by them. If they do this they should be regarded as commissioned services, albeit commissioned with a small c, as they do not receive local authority funding aside from enhanced Housing Benefit.

Accreditation is not regulation or oversight. It’s acceptance by a local authority that a provider operates strategically relevant supported housing that generates value[1].

As I have mentioned before, there is a multiplicity of regulators in the supported housing space: various national housing association/registered provider regulators, the Charity Commission, the CIC Regulator, the FCA none of which are specialists in supported housing.

For the most part supported housing is not overseen. The National Statement of Expectations doesn’t require local authorities to oversee supported housing, which is just as well as they are neither resourced and consequently skilled to do so.

I continue to argue for an independently developed and implemented supported housing oversight system with national scope and based on Value Generation principles. It should be developed by a university or think tank in consultation with the local authorities and providers but implemented independently. The outcomes it generates through formal oversight of supported housing should be fed back to local authorities and providers to inform funding and commissioning decisions and service improvement strategies.

The supported housing quality assessment system I propose (SHQAS) should be a Value Generation-based system. I defined the three value generation principles before and it’s important also to identify how these principles should be measured:

1. Outcomes for people: qualitatively measured
2. Cost benefit: quantitatively measured
3. Wider social and community benefit: both qualitatively and quantitatively measured

The SHQAS should be funded by the UK and national governments. It shouldn’t cost providers and local authorities anything.

Conclusions

So, if you’re thinking about claiming enhanced Housing Benefit, be mindful of the fact that many local authorities are placing restrictions on the amounts they will pay and to whom.

Blanket approaches at restriction are exercises in cost control, not necessarily strategies to invest in supported housing providers that generate value and to restrict resources to those who don’t.

This means that there are many good supported housing providers, that don’t work with registered providers, that will have their revenue restricted. There are some not so good supported housing providers that work with registered providers (some of which are also questionable) which won’t have their revenue restricted.

The Exempt Accommodation Project is a means of rectifying this problem by matching good supported housing providers, which are “approved” by their local authorities, with good community-based registered providers.

In terms of how a local authority “approves” a supported housing provider I believe it should do so via a local accreditation process. No need to reinvent the wheel here: this is what local authorities used to do in the days of “Supporting People”. Bring out the old Supporting People accreditation framework, dust it down and update it for use today.

I don’t believe that local authorities are resourced or skilled to oversee supported housing, and in any event, we need to separate oversight on the one hand from commissioning and funding on the other. Hence, I have argued that a system for the oversight of supported housing, with national scope, should be developed by an independent agency such as a university or think tank and then implemented by that agency independently of both local authorities and supported housing providers. Clearly, the outcomes of the oversight process, which must be based on Value Generation principles, should be shared with both local authorities and providers to inform commissioning/funding decisions and service outcomes.

Michael Patterson

August 2021

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[1] Value Generation is: outcomes for people (who live in supported housing); cost benefit to the public purse & wider social and community benefit.