Tag: enhanced housing benefit

Categories
Finance & Funding Policy

Claiming Enhanced Housing Benefit & the DWP Housing Benefit Guidance for Supported Housing Claims

Department of Work & Pensions

Introduction

This briefing is aimed at supported housing providers claiming enhanced housing benefit [both registered providers and non-registered providers] and local authority supported housing commissioning and Revenues and Benefits colleagues.

Enhanced housing benefit became a “thing” from around 2005 when a few of us working in the sector back then we’re looking to identify an alternative revenue stream for supported housing in the light of the retrenchment of “Supporting People” funding.

Enhanced housing benefit funded and funds what Supporting People progressively ceased to fund: essentially non-support related and property related services and functions that are provided in supported housing. Back in 2005 I described these housing benefit funded services and functions as “intensive housing management”; a term that has now become commonplace within the supported housing sector.

Enhanced housing benefit and intensive housing management have become an essential component of the supported housing sector over the years. The amounts of enhanced housing benefit paid annually has gone from £0 in 2005 to around £1 billion now. However, we have also seen industrial scale abuses of enhanced housing benefit over the years by money motivated actors. Consequently, people within the supported housing sector, such as myself, councils and government have shone a spotlight on the situation, and we now see terms such as “Wild West gold rush” [another widely adopted term I coined] being used to describe what is wrong with the system. The problem is not with enhanced housing benefit itself, but with those who abuse it and abuse people with additional needs whose money this is.

Consequently, over time we have seen inquiries, legislation, and regulations to try and manage the enhanced housing benefit system and the abuse is of it. In so doing it is important that the powers that be sort the enhanced housing benefit sheep out from the goats without throwing the baby out with the bathwater. There are very many excellent supported housing providers that claim enhanced housing benefit. They and their residents should not be prejudiced by the shameful abuses of a minority.

The legislative response can be seen in the form of the Supported Housing Regulatory Oversight Act 2023. I will be publishing an updated briefing on this legislation imminently and I will be running a series of events in the New Year, details of which will be published shortly.

The DWP Guidance

The regulatory response took shape in May 2022 in the form of the “DWP housing benefit guidance for supported housing claims”. As well as taking its cue from an understandable concern about the abuse of enhanced housing benefit, it also seeks to restrict eligibility for enhanced housing benefit to strictly property related services and functions.

In undertaking an analysis of this guidance, my purpose is to focus only on those parts which are directly relevant to enhanced housing benefit claims [paragraphs 137-178].

Paragraph 137: care, support and supervision must be linked to the property [it must not be floating support]. But see paragraphs 156-158 below.

Paragraph 138: the landlord doesn’t have to be the primary provider of care, support and supervision, but must provide a “more than minimal amount”. It is not enough for the landlord to simply facilitate or coordinate the provision of care, support and supervision.

Paragraph 140: where the care, support and supervision are commissioned by the local authority or the NHS and the landlord doesn’t provide a more than minimal amount of care, support and supervision, the accommodation in question would not be deemed to be specified accommodation and the tenants therein would not be eligible for enhanced housing benefit as a consequence.

Paragraph 142: the focus is on people, not buildings. All eligible claimants must need care, support and supervision to a more than minimal degree, whether or not they avail themselves of it. In some supported housing schemes, some residents may be eligible for enhanced housing benefit whilst others may not.

Paragraph 145: an admission to a supported housing scheme must include a needs assessment conducted by a suitably qualified and experienced person. This could be undertaken by the local authority or by the provider. Third party funding such as Personal Independence Payment or local authority/NHS top up is evidence of an established need and of an appropriate assessment.

Paragraph 148: the needs assessment referred to in paragraph 145 [above] must be supported by a care, support and supervision plan.

Paragraph 149: referral routes into supported housing matter and should be such that Revenues and Benefits colleagues can assume that a needs assessment has taken place. This means that self-referrals are not appropriate, housing options/ homelessness teams referrals are often not appropriate [at least not without supported housing commissioner support] and some third-party provider agency referrals are also not appropriate.

Paragraphs 150 to 155: we still await a formal definition of “care, support and supervision” as part of the Supported Housing Regulatory Oversight Act 2023 consultations. It is to be hoped that this will not be a restrictive definition that would negatively impact on enhanced housing benefit entitlements. This is especially so given the widening funding gap affecting non housing benefit eligible services such as support. However, the direction of travel in the DWP guidance is to try and restrict enhanced housing benefit payments and where the DWP is involved in defining care, support and supervision it would be no surprise if any formal definition was more restrictive still.

Paragraph 151: this paragraph states that there is no set number of hours of care, support and supervision required for the amounts to be deemed to be “sufficient”. However, many local authorities consider three hours of care, support and supervision per tenant a week [on an average basis] to be the minimum required amount and frequently reference case law [CH/1289/2007] in support of this.

As a catch all definition of “care, support and supervision” I believe that it is the totality of both housing benefit eligible [intensive housing management] tasks and functions and non-housing benefit eligible [support] tasks and functions.

Ongoing care, support and supervision is regarded as having more “value” in enhanced housing benefit claim terms than one off tasks and services, for example, signing someone up as a tenant. One to one support is more “valuable” than group support. Care, support and supervision provided by trained and qualified staff is more “valuable” than that provided by untrained/unqualified staff. Direct work with tenants, for example care, support and supervision provided on an agreed appointment basis is more “valuable” than a worker simply being available to be seen. Additional maintenance and repairs due to the needs of tenants should be seen as enhanced housing benefit eligible care, support and supervision.

It is essential that supported housing providers are aware of this and the need to evidence the nature and fact of the services they provide. I have seen too many situations where enhanced housing benefit is denied or withdrawn on the basis that the supported housing provider cannot evidence the support that it genuinely provides.

Paragraphs 156-158: “floating support” is care, support and supervision that is not linked to accommodation. In such circumstances the accommodation in question cannot be defined as specified accommodation, and therefore enhanced housing benefit is not payable. The DWP guidance justifies this on the basis that such accommodation “has not been specifically designed, acquired, adapted or designated to be supported housing”. It is worth noting that this statement is open to interpretation. Many supported housing providers and refuge providers who have dispersed or move on accommodation may well wish to designate as supported housing what might otherwise be seen simply as dispersed or move on accommodation.

Paragraphs 159-165: to qualify for enhanced housing benefit supported housing providers must provide both intensive housing management and support. Support is not fundable by housing benefit and supported housing providers must be able to show how much support is provided, of what nature and, crucially, how it is funded. It can be funded by third party sources such as the local authority/ NHS or charitable funding, via internal subsidy within the supported housing provider or by charging the tenants directly. The point is that within any enhanced housing benefit claim supported housing providers must identify the funding sources for the support that they provide.

Paragraphs 174-176: the DWP guidance reiterates the established view that for service charges to be eligible for housing benefit they must relate to the provision of adequate accommodation, so for example, assisting people to claim benefits is an ineligible charge because it has no impact on the condition of the accommodation. However, I would argue assisting tenants to claim housing benefit, as distinct from other benefits, is eligible.

The guidance then goes on to say [paragraph 175] that “charges for installation, maintenance or repair of any special equipment or adaptations to the claimant’s accommodation to make it suitable to their particular needs are not an eligible service charge”. I would have thought that special equipment and adaptations are absolutely related to the provision of adequate accommodation: however, this is not the view of the guidance, and I would be very interested in other peoples’ observations on this issue.

In paragraph 176 the guidance states that the overhead costs of support are not eligible as part of an enhanced housing benefit claim. I have come across situations in which Revenues and Benefits colleagues have used this paragraph to restrict all overhead costs, which is incorrect. Supported housing providers should be clear about the percentage of eligible services as opposed to ineligible services they provide [remember you must provide both] when calculating the appropriate eligible overhead charge.

Paragraphs 177-178: there follows a list of what I deem to be enhanced housing benefit eligible tasks and functions. This list is a combination of what is included within the DWP guidance and within my long-established briefing that is routinely used as a template for enhanced housing benefit eligible tasks and functions and related staff job descriptions. Please note that both the DWP guidance and my briefing both state that this list is not exhaustive:

  • Controlling access to the premises.
  • Ensuring rent is paid regularly and on time.
  • Explaining the occupancy agreement and assisting people to understand their rights and responsibilities in relation to it.
  • The additional costs of property maintenance and repair, housing services, furniture, fittings, and equipment where the furniture fixtures and fittings do not become the property of the resident.
  • Offering advice and guidance on keeping property to a reasonable standard of hygiene.
  • Liaising with all relevant agencies, both statutory and voluntary, on the tenant’s behalf to the extent that it concerns their ability to maintain/develop independence in relation to their housing.
  • Assisting people to reduce rent arrears.
  • Dealing with nuisance issues.
  • Ensuring that people know how to use equipment safely.
  • Providing people with advice and facilitating a move to alternative accommodation as required.
  • Assisting people to claim the housing component of Universal Credit
  • Helping to keep people safe by monitoring visitors, including contractors and professionals, and by carrying out health and safety, maintenance, and risk assessments of property.
  • Internet access within sheltered and supported housing.
  • PPE.
  • Support/IHM worker, concierge, caretaker, or warden staff – only allow the proportion of the charge for the time they are providing HB eligible accommodation-related services.
  • The overhead costs of providing HB eligible services (office costs, IT, travel, telephones, stationary etc).
  • Refuse removal of communal bins.
  • External cleaning of tenant’s windows where the tenant does not live on the ground floor.
  • Ongoing maintenance (including repair, cleaning, and utility) of equipment.
  • communal grounds (including basic gardening and lighting for areas of external access).
  • communal laundry facilities.
  • internal communal areas.
  • cleaning of windows in communal areas and of individual’s accommodation above ground floor level where they are unable to do it.
  • communal lifts.
  • communal telephone (excluding the cost of calls).
  • secure building access, including entry phones, key cards and keypad door locking mechanisms.

How I Can Help You

Claiming enhanced housing benefit is a technical process, even if you do have a good grasp of the regulations, and not every supported housing provider is sufficiently resourced or confident to construct an enhanced housing benefit claim and to defend it when local authority scrutiny is applied.

This is where I can help you. Remember, I was one of the few people who originally identified the exempt accommodation rules as the gateway to enhanced housing benefit back in 2005, and it was me who reinvented the term “intensive housing management” as a descriptor for the tasks listed above.

I take a collaborative approach with revenues and benefits colleagues in negotiating enhanced housing benefit claims. I don’t work with supported housing providers that local authorities haven’t approved, and I have an enviable success rate.

This is at least in part because of my commitment to ensuring that local authorities can fully recover from the DWP the enhanced housing benefit they pay to supported housing providers.

To achieve this, I set up the Exempt Accommodation Project in 2021, which now has several hundred units of accommodation in management and partnerships with half a dozen registered providers, many of them YMCAs.

My work in claiming enhanced housing benefit for supported housing providers is effectively cost neutral, whether or not you use the Exempt Accommodation Project.

My “call to action” to supported housing providers is that you should contact me if you need help with any aspect of enhanced housing benefit. My call to action to local authorities is that you should contact me if you need assistance in eliminating subsidy loss on the enhanced housing benefit claims.

Michael Patterson

November 2023

Categories
Policy

The Supported Housing (Regulatory Oversight) Act 2023

Supported Housing (Regulatory Oversight) Bill

Introduction

This blog post was written whilst the Act was still the Supported Housing (Regulatory Oversight) Bill, which has since received Royal Assent. As a consequence the blog post has been edited accordingly (July 2023).

A legislative response to the industrial scale abuse of the Exempt Accommodation rules and enhanced housing benefit has taken a long time to happen, but now we see it in the form of the Supported Housing (Regulatory Oversight) Act. Its 2021 predecessor, the Supported Housing Regulation Bill, also a private members bill, got nowhere because of lack of parliamentary time.

The Supported Housing (Regulatory Oversight) Act unsurprisingly succeeded because it was drafted in the light of the Exempt Accommodation Pilots report and, significantly, the Exempt Accommodation Inquiry Report, it mirrors much of the latter. Those of you who read my blog post on the Exempt Accommodation Inquiry Report will know that I have significant concerns about its conclusions and its failure to adequately grasp what Exempt Accommodation actually is.

Exempt Accommodation is not a dubious sub type of supported housing: the Exempt Accommodation rules are a set of rules that define who’s entitled to enhanced housing benefit. Most socially managed [or allegedly socially managed] supported housing is exempt accommodation.

General Observations

On balance, I think that the Supported Housing (Regulatory Oversight) Act is a great improvement on the Exempt Accommodation Inquiry Report, but the principle that “hard cases make bad law” can still be seen in it, particularly its misplaced focus on “regulation”, when the real problem is the lack of accreditation of supported housing providers at local level and independent oversight of the services they provide.

The idea that all supported Exempt Accommodation providers should register as registered providers, as recommended by the Exempt Accommodation Inquiry Report, is woeful for reasons I focus on in the accompanying briefing on the Exempt Accommodation Project.

There are 4 established regulators in the supported housing ecosystem already:

  • The Regulator of Social Housing [England]
  • The CIC regulator
  • The Charity Commission
  • The FCA

If you include the CQC (where personal care is provided in supported housing), then we have 5 regulators. In October 2023 Ofsted will regulate supported housing for 16-17 year olds and the supported housing ecosystem will have 6 regulators.

None of the above have any particular expertise in supported housing and none of them has a monopoly on supported housing providers. In the fight against dodgy supported housing providers and registered providers, the issue is not one of regulation, it is one of accreditation at local level and independent oversight of the services they provide.

The Clauses of the Supported Housing (Regulatory Oversight) Act

So, let’s have a look at the content of the Supported Housing (Regulatory Oversight) Act, including the amendments proposed during its parliamentary journey.

Clause 1: The Creation of an Advisory Panel​

  • The Secretary of State will be required to appoint an Advisory Panel.​
  • The panel will represent the interests of certain stakeholders including registered providers; local housing authorities; social services authorities and residents.​
  • The purpose of the panel is to provide information and advice on issues related to supported exempt accommodation, including anything which the Panel views could have a significant impact on the provision or regulation of supported exempt accommodation.​

Whilst the creation of an Advisory Panel is a good idea in my opinion, I think that its proposed membership is skewed and reflective of the idea that the whole of the supported housing ecosystem is regulated by the Regulator of Social Housing, which isn’t the case, and neither should it be.

It is to be hoped that the membership of the Advisory Panel will be broadened to include a more representative, dare I say democratic, representation of the supported housing ecosystem to include charities, CICs, other voluntary agencies and the private sector.

Clauses 10 & 11 as amended (see below) provide for the creation of a national supported housing regulator. This regulator should be a new body with specific expertise in supported housing and the scope of which should include all supported housing providers, irrespective of their legal identity.

Clause 2: Local Supported Housing Strategies​

  • Local housing authorities will be required to carry out a review of the supported exempt accommodation in their districts and publish a “supported housing strategy” for the provision of supported exempt accommodation. ​
  • A supported housing strategy must include a local housing authority’s assessment of supply and demand for supported Exempt Accommodation in its district, and such other matters as may be specified by the Secretary of State in regulations.​

This is actually a requirement of the National Statement of Expectations for Supported Housing. It is clearly a good idea for local authorities to have a supported housing strategy based on a knowledge of existing services mapped against supply and demand.

LA control over which organisations can set up supported housing in their areas is essential. The Exempt Accommodation Pilots led to the development of local authority hubs/gateways through which all intending supported housing providers must apply via a Supported Exempt Accommodation application process. The hub/gateway model is becoming more commonplace now, although not all local authorities have them yet.

Non-commissioned Supported housing providers, particularly “investor-led” and “property-led” providers whose primary purpose seems often to be making money at the expense of the supported housing ecosystem, and the people who depend on it, take note. The recent disasters associated with Home REIT and associated providers such as Lotus Sanctuary are a case in point.

I am continually asked by non-commissioned supported housing providers and their partners to help them to find a registered provider to work with, or to assist them with enhanced housing benefit claims. My response is always a firm “no”, unless a local authority at commissioning level gives me a green light to proceed. 

By “commissioning level” I mean the local government departments and other statutory agencies (social care commissioners, supported housing commissioners, revenues and benefits teams, the NHS and other statutory agencies with an interest in supported housing). I do not mean Homelessness/Housing Options teams as currently constituted. However, it’s important that people with additional needs who present as homeless are assessed properly and routed to supported housing, not temporary accommodation. (More on this in the commentary on Clause 6 below).

Clause 3: National Supported Housing Standards​

  • This will give the Secretary of State new powers to prepare and publish “National Supporting Housing Standards” for England.​
  • This will set minimum standards in respect of the type or condition of premises used for the provision of supported Exempt Accommodation or the provision of care, support or supervision in supported exempt accommodation​.

There have been several amendments to this clause as follows:

Amendment 1 tabled by Clive Betts MP would give local housing authorities the power to introduce a scheme to enforce the National Supported Housing Standards such as that described in clause 4 and 5 below. For this to be workable there would need to be additional funding made available to LAs.

Amendments 2 and 4 tabled by Clive Betts would require Secretary of State to produce a progress report after one year if certain powers are yet to be exercised. By which I mean the powers to prepare and publish “National Supported Housing Standards” and to make provision about the sharing of information relating to supported exempt accommodation.

It is essential that these National Supported Housing Standards are devised by a representative group of agencies with a full understanding of the supported housing ecosystem. The current proposed membership of the Advisory Panel referred to in Clause 1 will not be sufficient. Clearly, “local housing authorities; social services authorities and residents” are essential parties to this Panel, but it should also include independent thought leaders in supported housing who do not have bias towards any specific part of the supported housing ecosystem such as the Regulator of Social Housing or related agencies.​

Clauses 4 & 5: Licensing​

  • Clause 4 would give the Secretary of State power to make regulations requiring people managing supported Exempt Accommodation to obtain and comply with a license issued by the relevant local housing authority.  ​
  • Clause 5 sets out the range of issues which licensing regulations may cover, including: enforcement, consequences of non-compliance, exemptions and fees, restrictions and the areas that a licensing scheme should cover.​

There are already number of “selective licensing schemes” being piloted or considered by local authorities.

The Supported Housing (Regulatory Oversight) Act identifies that people who apply for a license to operate supported housing must be “fit and proper persons”. A failure to meet whatever that means will result in the refusal of a license.

There are a significant number of areas that would fall within the scope of a selective licensing scheme:

  • The standard of accommodation.
  • The use of accommodation.
  • Carrying out of assessments of the needs of residents (or potential residents) and relating to the conduct of such assessments.
  • The provision of care, support or supervision.
  • Compliance with National Supported Housing Standards (whenever published)

The Act provides for penalties to be applied to supported housing providers and the people who run them.

A license can be revoked and a fine levied where a supported housing provider or a person who controls it commits a relevant housing offence for the purposes of section 249A of the Housing Act 2004.

A supported housing provider or the person who controls it may be subject to a banning order as provided for in Chapters 2 and 3 of Part 2 of the Housing and Planning Act 2016. This includes being recorded on a database of “rogue landlords” and requiring the repayment of rents received whilst in breach of a licensing requirement.

Clause 6: Consultation​

  • The Secretary of State must consult statutory consultees before exercising the power to make licensing regulations.​
  • The statutory consultees listed are: Local Government Association, National Housing Federation and the Regulator of Social Housing. ​

Amendments to the Act by its sponsor/author Bob Blackman MP propose that local authorities be identified as “statutory consultees” on the Bill on licensing regulations and the National Supported Housing Standards in place of the Local Government Association.

Again, the choice of the Regulator of Social Housing and the National Housing Federation limits the scope and expertise of the “statutory consultees”. This doesn’t mean that they shouldn’t be included, but it is essential that this mechanism has a wider set of interests other than just agencies that are regulated by the Regulator of Social Housing.

Amendment 3 tabled by Clive Betts MP ensures that assessing the needs of persons who are residents/potential residents is a condition that may be attached to a license to operate supported housing. The assumption is that LAs would be responsible for such assessments via a single hub or gateway through which all supported housing referrals should be routed. This would give LAs control over who becomes a supported housing resident in their area as well as preventing providers offering accommodation to “self-referrals” and people from other geographical areas. Presumably, different arrangements might be required for people fleeing domestic violence and abuse, for example.

It is also possible that supported housing providers may be responsible for undertaking needs assessments within a local authority approved framework.

The single hub/gateway arrangement, which some LAs already implement, is a by-product of the Exempt Accommodation Pilots and should also contribute to LAs’ requirements to balance need and demand within their local supported housing ecosystem.

However, there is a structural problem at local authority level with Homelessness/Housing Options teams not being part of local commissioning infrastructure. These teams have a statutory obligation to house people, the great majority of whom have additional needs, so there is an unmanaged overlap between them and their commissioning colleagues. The needs assessment process could therefore be an important part of local infrastructure, whether conducted by local authorities or supported housing providers, in ensuring that homeless people with additional needs are routed into supported housing rather than temporary accommodation.

Clause 7: Local Housing Authority Functions ​

  • A local housing authority must, in the exercise of its functions under licensing regulations, have regard to— (a) National Supported Housing Standards (if any), and 10 (b) any guidance issued by the Secretary of State for the purposes of this section.​

This section is self-explanatory, and the missing part is the National Supported Housing Standards document, with which supported housing providers must comply, as described in Clause 3 (above).

Clause 8: Planning​

  • This places a duty on the Secretary of State to review the effect of licensing requirements within three years of regulations being made.​
  • Following such a review, the Secretary of State would be required to consider whether to specify exempt supported accommodation as a use-class which would require planning in certain circumstances​.

This clause needs to be read in conjunction with clauses 4, 5, 6, & 7 above.

Currently the planning use class position for supported housing (remember that pretty much all socially managed supported housing is “exempt supported accommodation”) is confused.

Supported living (i.e. where a single person or a couple receives support in their own home) is subject to use class C3(a) and supported housing where up to 6 people live together as a single household is subject to use class C3(b). See here.

It is therefore the case that supported housing schemes of 7 or more people in shared accommodation fall outside of the planning use classes. If the Supported Housing (Regulatory Oversight) Act provides an opportunity to sensibly rationalise the planning use classes for supported housing, then this would be a good thing.

Clause 9: Homelessness​

This clause would ensure that where someone chooses to leave exempt supported accommodation due to poor conditions or care, and the standards within the accommodation do not meet the National Supported Housing Standards, they will not be classed as “intentionally homeless”.​

This clearly a good thing. It is nothing short of disgraceful that people with additional needs are faced with a Catch 22 situation where they’re forced to continue to live in poor conditions in so-called supported housing, or to live on the streets because they’re “intentionally homeless”, having refused to live in poor conditions in so-called supported housing that takes their enhanced housing benefit entitlements in exchange for poor accommodation with nil or negligible support.

Clauses 10 & 11: Information Sharing About Exempt Accommodation​

  • Gives the Secretary of State power to make regulations relating to the sharing of information on Exempt Accommodation by a local authority; a registered provider of social housing; the Regulator of Social Housing and the Secretary of State.​
  • Provides that certain information obtained under specified legislation relating to housing benefit or council tax, can be used by a local housing authority for any purpose connected with the exercise of any of its functions under the Act, or otherwise relating to specified exempt accommodation, or for the purposes of investigating whether any offence has been committed by virtue of the Act.​

Amendment NC1 tabled by Clive Betts MP would require the Secretary of State to consult on the establishment of a national regulator of supported exempt accommodation. This might be “an existing public authority”.

As with some other parts of the Supported Housing (Regulatory Oversight) Act, the focus here is too limited to the Regulator of Social Housing and Regulator of Social Housing regulated agencies, which by no means represent the totality of the supported housing sector. This limited scope excludes charities, CICs, other forms of voluntary agency and, crucially, the private sector. As I have observed above, the same criticism can be applied to the membership of the Advisory Panel under clause 1 (above).

Clive Betts’ amendment NC1, however, gives us the opportunity to establish a new “national regulator of supported exempt accommodation”. This agency should specifically not be the Regulator of Social Housing, the Charity Commission, the CIC regulator, the FCA or the CQC, none of which really understand supported housing and none of which have a monopoly on the regulation of supported housing providers.

Amendment NC2 by Kate Hollern MP states that all residents of supported housing should be provided by the local authority with a Charter of Rights that should include:

  • A statement of the rights of residents of supported exempt accommodation.
  • A statement of the responsibilities of providers of supported exempt accommodation.
  • Information about support services for residents of supported exempted accommodation.

Rather than reinvent the wheel on this, why not simply adopt Spring Housing’s “Charter of Rights for Supported Exempt Accommodation” residents?

Conclusions

This Act has some shortcomings, however, it’s a very big step in the right direction towards ridding supported housing of the parasites that infest it in the guise of certain supported housing providers, RPs, developers and investors that are interested in financially abusing people with additional needs in return for shoddy properties and negligible or no support.

The Act provides for local infrastructure to manage supported housing, including licensing powers. It prescribes a set of national standards for supported housing, which are well overdue, although these should be informed by a wider set of interests than has been proposed.

The Act has an unnecessary preoccupation with supported housing providers that are regulated by the Regulator of Social Housing, and this comes at the expense of other non-profit supported housing providers and of the private sector. We need an overarching piece of legislation that captures the totality of the supported housing ecosystem. The future regulator of supported housing must not be an existing regulator.

The Act doesn’t challenge the status quo of the exempt accommodation rules, which should be abolished, and the local authority subsidy rules, which should be changed to stop local authorities favouring registered providers, for financial reasons, as supported housing landlords.

The Act also doesn’t specifically address the confusion at local authority level where people with additional needs are routinely routed into temporary accommodation by Homelessness/Housing Options teams when they should be routed to supported housing. However, the amendments to Clauses 4 & 5 that require a local authority (or supported housing provider on its behalf) to carry out needs assessments of people in the context of supported housing may be a means by which this anomaly is resolved.

The Act rightly emphasis the rights of people with additional needs by requiring a Charter of Rights for residents of supported housing. It also requires that people who leave poor quality supported housing should not be declared to be “intentionally homeless”.

How We Can Help You

We are currently offering Board, SMT and staff team briefings to supported housing providers, registered providers, social impact investment agencies and the statutory sector on the implications of the Supported Housing (Regulatory Oversight) Act. These can be delivered face to face or remotely and are based on an agreed brief with each agency. Usually, they are 2–4-hour events, depending on what your organisation requires.

Please call 0800 002 9467 to discuss this.

Michael Patterson

April 2023

Categories
Policy

The Exempt Accommodation Inquiry Report

Exempt Accommodation Inquiry Report

Introduction and Background

On 27th October we finally saw the long-awaited Exempt Accommodation Inquiry Report. The purpose of this briefing is to summarise it and the wider context of Exempt Accommodation in general.

My name is commonly associated with Exempt Accommodation as one of a few people who identified it, and Enhanced Housing Benefit, as a means for supported housing providers to offset some of their revenue loss from the retrenchment of the Supporting People initiative from 2005 onwards.

The Exempt Accommodation Inquiry Report states “we would describe the system of Exempt Accommodation as a complete mess”. Those of you who read my blog posts and briefings will know how strongly I feel about people and organisations who use the Exempt Accommodation system for personal gain, some of whom do so on an industrial scale.

Work that I and others have done on Exempt Accommodation and Enhanced Housing Benefit has led to the creation of a revenue stream for supported housing of around £1 billion a year, in the absence of any meaningful alternative revenue stream for supported housing.

The term “Intensive Housing Management”, which is what Enhanced Housing Benefit funds for Exempt Accommodation providers to provide eligible services, exists because I identified and reintroduced that term in 2005 to describe the tasks and functions Enhanced Housing Benefit funds.

The problem is that greedy, unprincipled, money grabbing people have taken it upon themselves to abuse people with additional needs for their own financial gain. In some cases, making millions of pounds every year off the backs of people they’re supposed to be accommodating and supporting.

Since I and others began raising concerns about the situation some years ago, we have seen developments such as the National Statement of Expectations for Supported Housing, the Exempt Accommodation pilots and related things such as the May 2022 DWP Guidance for the Administration of Housing Benefit claims for supported housing as well as the Exempt Accommodation Inquiry itself.

I have strongly advocated a values-based approach to the management of the supported housing ecosystem, including accreditation of supported housing providers at local level and an independent oversight system.

General Observations

I’m pleased to say some of what I advocate in this regard has been acknowledged in the Exempt Accommodation Inquiry Report including the language I have used to describe Exempt Accommodation abuse such as the “wild west gold rush“. This particular soundbite also seems to have been adopted by Bob Blackman MP, a member of the DLUHC Inquiry Committee and the sponsor of the recently published “Supported Housing (Regulatory Oversight) Bill” currently heading for its second reading in Parliament. However, the Exempt Accommodation Inquiry Report, whilst justifiably angry, is a somewhat patchy and in places a disappointingly unhelpful response.

Detail on the Supported Housing (Regulatory Oversight) Bill is currently sparse, but I assume that its content will reflect that of the Exempt Accommodation Inquiry Report. If it does, it will cause me similar concern to that raised by my reading of the Report, which follows below. We have the opportunity to deal with the unfit for purpose Exempt Accommodation Rules and the dubious people who abuse them and the people they’re supposed to accommodate and support. My reading of the Report does not give me confidence that we’re on the right track here.

My own view is that the Exempt Accommodation rules should be abolished. They have been used for the obverse of which they were intended, which was (ironically) to prevent abuse of the Housing Benefit system. For the past 10 years people in supported housing (except private sector supported housing) have had the housing component of their Universal Credit administered as Housing Benefit under the Exempt Accommodation rules, meaning that it is effectively uncapped. Why don’t we formalise that arrangement so the tenants of locally accredited supported housing providers of any legal identity can claim what I have previously referred to as “Supported Housing Rent“?

We need radical, uncomplicated, structural change to rid the supported housing ecosystem of the thieves and abusers that infest it in the guise of supported housing providers, and in some cases registered providers. But the Exempt Accommodation Inquiry Report doesn’t go nearly far enough to achieve this.

I still don’t think that the Exempt Accommodation Inquiry has quite grasped the fact that most (socially managed) supported housing is actually Exempt Accommodation, and that Exempt Accommodation isn’t just a potentially dubious subtype of supported housing. If the Inquiry had taken this wider view of Exempt Accommodation, maybe it would have come up with a more comprehensive prescription for structural change in the funding of supported housing.

The Exempt Accommodation Inquiry Report’s focus on “regulation” is unfortunate. I have been saying for a long time that the issue is not one of regulation, it’s one of accreditation and oversight. I note the Report does now use the term “oversight”, but unfortunately not of the services supported housing providers provide. The emphasis seems to be more on “regulatory oversight” of the supported housing providers themselves.

The Exempt Accommodation Inquiry Report comments on the variable “quality of Exempt Accommodation” and refers to the National Statement of Expectations as a framework to focus on the housing element of Exempt Accommodation. It rightly emphasises the need for there to be recognised referral pathways into Exempt Accommodation.

Any of you involved in Exempt Accommodation on the ground will know that many local authorities already place significant emphasis on referral pathways into Exempt Accommodation as part of their efforts to manage their supported housing ecosystems.

The Exempt Accommodation Inquiry Report also calls for a clear definition of “care, support and supervision” the provision of which on a “more than minimal basis” is a requirement of Exempt Accommodation compliance. It recommends a set of national standards for “referrals, support and accommodation” should be enforced by local authorities. It recommends that the UK Government should, within 12 months, publish national standards on:

  • Referrals processes
  • Care support and supervision
  • Housing quality
  • Information supported housing providers should give to residents

And that new funding should be given to local authorities to implement these.

Domestic Violence and Abuse.

On the issue of domestic abuse, the Exempt Accommodation Inquiry Report is more reassuring. I’m very aware of the fact that there is a proliferation of organisations offering housing to victims of domestic violence and abuse whilst having no specialist experience in this area.

This isn’t helped by local authorities routinely referring such people to non-specialist supported housing via their statutory homelessness obligations.

The Exempt Accommodation Inquiry Report rightly recommends that Enhanced Housing Benefit, in this context, should only be paid to supported housing/refuge providers that “meet the standards in Part 4 of the Domestic Abuse Act 2021” and that there should be an increased supply of such “relevant specialist services”.

Regulation and Oversight

My view has always been and remains that supported housing providers should be accredited (or not as the case may be) by local authorities exactly as they were under the Supporting People initiative, and that their services should be overseen by an independent agency using the three Value Generation principles.[1]

Unfortunately, the Exempt Accommodation Inquiry Report’s recommendations in respect to regulation and oversight is something of a dog’s breakfast. The report acknowledges, as I have consistently maintained, there are several regulators in the supported housing ecosystem, none of which has “complete oversight of the different elements of Exempt Accommodation”. It also observes that some supported housing providers are not regulated. It recommends the creation of “National Oversight Committee” to address the oversight of supported housing providers (but not the services they provide.) This committee should apparently be comprised of “existing regulators” (presumably the Regulator for Social Housing, Charity Commission and the CIC Regulator) which the Report describes as being “expert in their own areas”.

To be honest I do not believe that any of these regulators are remotely “expert” in supported housing in general or Exempt Accommodation in particular. My experience of the RSH, for example, is that it has never understood supported housing and that it tends to treat supported housing a “bolt on” to mainstream social housing. Its attempts to try and force rent structures for supported housing into the unviable “low-cost social housing” model as per section 69 of the Housing and Regeneration Act 2008 is an illustration of this.

I reiterate that accreditation at local level would be a much stronger and more effective solution. We already have the Supporting People accreditation frameworks which could be refreshed and reused for this purpose. A “National Oversight Committee” on the terms suggested by the Exempt Accommodation Inquiry Report would add to the “complete mess” the Report identifies. The supported housing sector doesn’t need more regulation: it needs accreditation at local level and oversight on an independent basis.

What is perhaps even more alarming is the recommendation that supported housing providers should have to register as registered providers and its blithe dismissal of the fact that the Regulator for Social Housing has deliberately made it increasingly difficult for supported housing providers to register. The report states that “registration should not be unnecessarily onerous or expensive, and if it is that should change”.

Trying to register supported housing providers with the RSH is akin to trying to stuff a camel through the eye of a needle, and if it were a straightforward process we would end up with a situation where supported housing providers are forced to register with a regulator that doesn’t want them and doesn’t understand them. Furthermore, why should it be the case that, for example, supported housing provider charities and CICs, which are already regulated, are forced into the regulatory purview of another regulator? Private sector supported housing providers, some of which are very good, may simply cease to operate rather than be forced to register with the RSH.

A solution to this problem can be seen in the Exempt Accommodation Project, which brokers relationships between supported housing providers and community-based registered providers wherein the registered providers take leasehold interests in the supported housing providers’ properties, thus becoming the landlord.

This is a far simpler solution than trying to force supported housing providers to register as registered providers, and it does comply with the spirit of the Exempt Accommodation Inquiry Report’s rather misguided approach to this issue without making the mistakes of that approach.

The Exempt Accommodation Project needs more community based registered providers to get involved with us to work with supported housing providers. Please get in touch with me for more information about this.

Lease-Based Models

The Exempt Accommodation Inquiry Report accepts that leased-based models similar to that used by the Exempt Accommodation Project are a necessary part of the supported housing ecosystem. It does, however, object to this model on a “for-profit” basis.

I absolutely understand the need to stamp out excessive profiteering through lease-based supported housing models, but the approach of the Exempt Accommodation Inquiry Report, which wants to “prohibit lease-based profit-making schemes from being set up” is frankly silly.

We definitely need to sort out the lease-based sheep from the goats, but the Exempt Accommodation Inquiry Report recommendations will also throw the baby out with the bathwater. There is a world of difference between the approach taken by excellent lease-based models used by social impact investors that look to establish high quality, transparently costed supported housing with an annual return in the region of 5-6% on the one hand, compared to others that grossly inflate the capital costs involved and then look for excessive percentage returns on their artificially inflated capital sum.

Supported housing absolutely needs private capital investment with acceptable rates of return for social impact investors. Is the UK Government about to announce large-scale public capital investment in supported housing? I doubt it somehow, and I think that the language used in this regard by the Exempt Accommodation Inquiry Report is positively dangerous for essential private capital social impact investment in supported housing that must rely on a reasonable profit-making lease-based model.

Funding

The Exempt Accommodation Inquiry Report recommends that the UK Government, not for the first time, should “conduct a review of Housing Benefit claims to determine how much is being spent on what”.

It also says that “rent should be capped at a reasonable level to meet the higher costs of managing Exempt Accommodation”, a principle that I have proposed as part of my “Supported Housing Rent” proposition.

It is imperative in this context that local authorities resist the temptation to apply a cost control approach when establishing what a “reasonable level” is. A reasonable level is the actual cost of providing good quality supported housing on a transparent, open book basis, that the Exempt Accommodation Inquiry Report wants to see.

The Exempt Accommodation Inquiry Report states that “funding for support should be provided separately”. It doesn’t say how. Since the demise of Supporting People, “support” has hardly been funded at all. Whilst Enhanced Housing Benefit doesn’t fund “support”, the last few years, and especially since the DWP guidance of May this year, have seen an increasing pressure on the part of local authorities to restrict Enhanced Housing Benefit funding to strictly directly property-related tasks and functions. Please see the Supported Housing Blog for a list of routinely eligible Enhanced Housing Benefit tasks and functions.

It’s all very well for the UK Government to say that “funding for support should be provided separately”, but where is this funding?

The Exempt Accommodation Inquiry Report also states that “the Government should also consider how to give councils greater control over rents for Exempt Accommodation to ensure value for money”. The DWP guidance mentioned above does do this to a certain extent, but a much more effective response would be to abolish the Exempt Accommodation Rules, as I’ve previously argued, replace Enhanced Housing Benefit with Supported Housing Rent, which should have reasonable local maxima and have a locally administered accreditation system for supported housing providers without which supported housing rent cannot be paid.

Planning

The Exempt Accommodation Inquiry Report recommends that all supported housing, irrespective of the number of people living in a particular scheme, should be subject to HMO licensing. This includes properties where the landlord is a registered provider.

This will have a detrimental impact on many existing supported housing schemes which may have to be reconfigured in order to comply. Any loss of capacity (i.e. room numbers) as a consequence will lead to a corresponding loss of revenue that may render it unviable. In addition, who is going to pay for the necessary work?

Many local authorities are currently rolling out selective licensing schemes for supported housing within which there should be mechanisms for ensuring health and safety within such supported housing schemes that do not currently require an HMO licence.

Blanket enforcement of HMO regulations is at best a crude instrument. HMO regulations are right and proper within the properties to which they were originally meant to apply. Applying them wholesale to the entirety of our supported housing stock will cause significant expense, potential loss of revenue on a permanent basis, unviability and, in some cases, will create an unnecessarily institutional environment in smaller supported housing schemes.

Conclusions

There is a saying that “hard cases make bad law” and I believe, unfortunately, that this is what we’re seeing here. With some exceptions, notably on domestic violence and abuse services, this Report is a missed opportunity based on an inadequate grasp of the supported housing ecosystem that it wishes to reform.

The preoccupation with “regulation” as opposed to local accreditation of supported housing providers and independent oversight of their services skews the focus and conclusions of the Report. Furthermore, the idea that the Regulator for Social Housing and the Charity Commission, for example, should be responsible for the “regulatory oversight” of supported housing providers and the development of national policy in this regard is akin to suggesting that the Football Association should oversee rugby clubs. Supported housing, in my opinion, does not need more regulation, especially from agencies that don’t fully understand it. It is, however, in desperate need of organisational accreditation and service delivery oversight systems.

The recommendation that no further “for profit leased-based” supported housing should be developed is a crude response to an undoubted problem. It would certainly get shot of dodgy developers after a fast buck, but it would also prevent good quality social impact investors from providing much needed (and inexpensive) private capital for supported housing in circumstances where public capital is scarce indeed and the need for supported housing is increasing, not decreasing.

Similarly, the insistence that all supported housing providers should register with the RSH and also be subject to HMO regulations is an impractical, kneejerk response that will cause huge problems.

We don’t need to reinvent the wheel here. The solution to the abuse of the Exempt Accommodation rules is to abolish those rules, reintroduce the organisational accreditation process to which supported housing providers were subject under Supporting People, introduce an independent (of local authorities and providers) service oversight system based on Value Generation principles, and pay Supported Housing Rent to accredited providers instead of enhanced Housing Benefit, which should be abolished along with the Exempt Accommodation rules.

[1] Outcomes for people (measured qualitatively), cost benefit to the public purse (measured quantitively) wider social and community benefit (measured qualitatively and quantitively).

Categories
Finance & Funding

The Consultation on Rent Capping & Enhanced Housing Benefit

Rent Cap

As you’re doubtless aware the Regulator for Social Housing is currently consulting on the introduction of a core rent increase of 3%, 5% or 7% for social housing. The consultation is here.

The reason for the consultation is the significant increase in the rate of inflation in circumstances where social housing core rents can currently be annually increased by CPI +1%. If CPI is around 10%-11% or more, then a core rent rise of this magnitude is unsupportable by the great majority of mainstream social housing tenants. Many would argue that any core rent rise is unsupportable by many social housing tenants.

What is significant, to me at least, about this consultation is that supported housing is not exempt from the cap, and that supported housing is expected to meet the definition of “low-cost rental accommodation” (e.g., homes let at Social Rent or Affordable Rent). 

The Regulator hasn’t entirely closed the door on exempting supported housing from the proposed cap, much depends on your responses to the consultation. If you have supported housing stock, please do respond to the Consultation and set out clearly the implications of core rent capping for your schemes.

When rent convergence was introduced back in 2010, the Regulator (then known as the Housing Corporation) seemingly omitted to consider supported housing before deciding to give supported/sheltered housing 10% leeway on the core rent convergence figure, which is not a realistic reflection of the additional core rent costs of supported housing.

Assuming that the Regulator is limiting its focus to the core rent, not the gross rent, when putting together enhanced Housing Benefit claims for supported (and some sheltered) housing we must offset the core rent costs in excess of the allowed amount into the service charge in order to conform with core rent compliance. This would make a mockery of the core rent compliance requirements were it not for the fact that it’s already a mockery in the context of supported housing, because the core rent costs of supported housing routinely exceed the allowable core rent amount, even with the 10% leeway. If the Regulator wishes to cap the gross rent for supported housing, then we have a big problem.

I am currently involved in supporting RP clients to respond to demands from the Regulator for Social Housing that RPs structure (specialised) supported housing rents at “social levels”. In so doing they say that for supported housing to be deemed as “social” it must comply with section 69 of the Housing and Regeneration Act 2008, this is even though Specialised Supported Housing is supposedly exempt from the Rent Standard entirely. Again, in this context, the Regulator hasn’t clarified whether it means the core rent or the gross rent.

Furthermore, I was told by a social impact investor that the Regulator for Social Housing had told them that “exempt rents will be beyond our regulatory scope”. Again, do they mean only Specialised Supported Housing, within which the core rent is effectively unrestricted, or do they mean all types of supported housing where the gross rent levels routinely exceed “low cost/social rent” levels?

If they’re referring to the gross rent, what this means is that the Regulator for Social Housing does not regard supported housing in receipt of exempt rents to be “social housing”. For RPs that have accommodation that is deemed to be “social housing” as well as supported housing with exempt rents, this shouldn’t make a difference to enhanced Housing Benefit entitlements as they’re regulated organisations with regulated occupancy agreements. In fact, the removal of inappropriate regulatory demands from supported housing providers could be helpful. However, for RPs that only have “exempt rent” supported and sheltered housing, they face the potential prospect of being told they don’t have any “social housing” and will therefore be subject to deregistration with a significant threat to their enhanced Housing Benefit entitlements. If this does occur the Exempt Accommodation Project may be able to help. Please contact me about this.

Enhanced Housing Benefit.

Whilst the position of the Regulator for Social Housing on supported housing and exempt rents is at best ambivalent, it is nonetheless important for RP and non-RP providers of supported (and some sheltered[1]) housing to review their enhanced Housing Benefit claims, especially in the light of surging energy costs that equate to around 70% of the inflation rate. Energy costs are a service charge cost, not a core rent cost. 

Similarly, maintenance and repair costs are increasingly expensive. To the extent to which this is an issue for mainstream social housing, which it definitely is, it’s a huge issue for supported and sheltered housing. The opportunity to try and offset at least some of the increased maintenance and repair costs through a revised enhanced Housing Benefit claim is important to take.

As you may know, we work with Danny Key on larger enhanced Housing Benefit projects and only charge if we are successful in increasing your enhanced Housing Benefit entitlements (we charge a percentage of the increase we achieve, payable only when you are in receipt of the increased amounts, and payable over a period of up to 12 months).

It is increasingly difficult for supported housing providers that don’t work with RPs to negotiate enhanced Housing Benefit claims. If you’re in this situation the Exempt Accommodation Project may be able to help if you’re a local authority approved provider. The Exempt Accommodation Project is very busy now, and we are always looking for community-based RPs to work with us on this whilst they develop a leasehold portfolio and an attractive revenue stream. Please contact me directly about this.

Supported housing providers who want help with enhanced Housing Benefit claims, with or without an RP, please contact revenue@michaelpatterson.co.uk. If you have Danny’s contact details and you go direct to him, please cc revenue@michaelpatterson.co.uk and let Danny know you’re contacting him having read this briefing.

  1. Where the landlord provides care, support & supervision that is “more than minimal”.
Categories
Policy

The Problems with Exempt Accommodation

problems with exempt accommodation
problems with exempt accommodation

Background

Back in 2005 the primary revenue funding stream for supported housing was “Supporting People funding”, a £1.8 billion UK wide funding pot that had been rolled out two years earlier but was already retrenching markedly. Supported housing providers were struggling to cope with revenue reductions after having been encouraged to grow their services by the government of the day, which then immediately set about restricting the Supporting People revenue upon which those schemes depended.

It was at that time that I and a few others identified a means of offsetting some of that revenue loss. We identified the existence of the Exempt Accommodation rules, an arcane set of regulations that entitled agencies that complied with them to claim enhanced levels of Housing Benefit for providing certain housing related services to people with additional needs. I reinvented the term “intensive housing management” to describe those services and set about promoting the Exempt Accommodation rules, enhanced Housing Benefit, and intensive housing management to the supported housing sector. Over 15 years later, enhanced Housing Benefit has become the primary funding stream for supported housing totalling around £1 billion per year.

Problems?

I hope you’ll forgive me for taking pride in having been instrumental in creating that £1 billion revenue pot. However, in addition to a sense of pride I also have a sense of intense anger at the fact that the Exempt Accommodation rules have been roundly abused by organisations and individuals that have made massive amounts of money, and still do, through the wholesale financial abuse of people with additional needs.

Housing Benefit, whether enhanced or not, is a personal benefit. This personal benefit is being diverted into the pockets of dubiously motivated people on an industrial scale.

To qualify your tenants for enhanced Housing Benefit you must be an “exempt landlord”: put simply; a “housing association”, a charity or voluntary organisation.

The Exempt Accommodation rules were devised in 1996 to prevent ill motivated private landlords from robbing the Housing Benefit system by providing poor quality bed-and-breakfast accommodation to homeless people and charging the local authority a fortune for it. The government of the day introduced the Exempt Accommodation rules to restrict private landlords to Local Reference Rent levels (now known as Local Housing Allowance). Certain landlords, identified above, were exempt from those rent levels, so exempt landlords could claim enhanced levels of Housing Benefit.

What has happened since enhanced Housing Benefit became a major revenue stream is that certain individuals have abused the system by setting up allegedly exempt landlord structures, which are nothing more than badly motivated private businesses masquerading as exempt accommodation compliant supported housing providers.

These businesses are exploiting the Exempt Accommodation rules to use them for the very opposite purpose for which they were intended, which was to prevent, not enable, the abuse of peoples’ Housing Benefit entitlements.

But it’s not just dubious supported housing providers, which milk the system and provide poor quality accommodation and minimal or non-existent services that are the problem. Commercial greed has affected the entire supported housing ecosystem.

Private Capital

Don’t get me wrong here; I absolutely believe that private capital is essential for the development of new supported housing schemes. Whether you fund supported housing, commission supported housing, deliver it, or measure its quality you need to do so according to a set of principles. A few years ago, I devised “Value Generation” as this set of principles:

  • Outcomes for people (qualitatively measured)
  • Cost benefit to the public purse (quantitatively measured)
  • Wider social and community benefit (qualitatively and quantitatively measured)

So, if you don’t generate value you shouldn’t be involved in supported housing.

Just as many supported housing providers do a brilliant job for people with additional needs, some private capital providers do the same thing. To get an idea of what I mean you could do worse than to book onto our free virtual supported housing conference 2022. One of the sessions will be led by Assetz Exchange, which acquires and leases property for supported housing and whose investors can expect a yield of in the region of 5%, which is entirely reasonable and is an exercise in Value Generation.

By comparison, I’m aware of other private capital providers who think that 9%, 10%, 12% or 15% yields are reasonable and some of which would think nothing of using dubious valuation methodologies as a means of inflating the property lease cost for enhanced Housing Benefit claim purposes. Often the only value being generated in such examples is financial value to investors and shareholders at the expense of services for people with additional needs, who are supposed to be the point of and the priority for supported housing.

The Invasion of the Supported Housing Ecosystem & the Response to it

Many of the money motivated private capital providers have made common cause with equally money motivated registered providers, which in turn work with supported housing provider agencies that take on the identity of CICs and other allegedly non-profit structures.

This has led to an invasion of the supported housing ecosystem by people and organisations who know how to play the system for financial gain.

This influx of the uninvited has led to significant pressure on local authorities and enhanced Housing Benefit. Alleged supported housing providers, whether connected to dubiously motivated private capital or not, have popped up all over the place, usually in the form of a CIC, and demanded enhanced Housing Benefit for alleged supported housing services that no one asked them to provide.

One of the consequences of this is the National Statement of Expectations for Supported Housing, published by the UK government (England only) in October 2020, which tells local authorities to restrict the number of new supported housing “market entrants”, to restrict the payment of enhanced Housing Benefit (without actually using those words) and exhorts commissioners and revenues and benefits teams to work together in the administration of enhanced Housing Benefit.

“Inside Housing” magazine continues to run an information campaign on the uncontrolled growth of exempt accommodation. Thea Raisbeck on behalf of Commonweal Housing and Spring Housing published “Exempt From Responsibility?“, which focuses in particular on Birmingham; an outlier in exempt accommodation abuse with 22,000 exempt accommodation bed spaces. Many of these are in poor quality housing within which negligible or no services are provided, but which attract high levels of enhanced Housing Benefit. Where does that money go, I wonder?

But it’s not just Birmingham, bad though the situation is there. The MHCLG (now the DLUHC) set up five exempt accommodation pilots in Birmingham, Hull, Bristol, Blackburn and Blackpool all of which are exempt accommodation “hotspots”. Those pilots recently reported.

The “Supported Housing Oversight Pilots” evaluation report is heavily qualified methodologically and contains a plea for more funding for further evaluation. This wish appears to have been partially met by the UK government’s recent announcement of £20m towards a Supported Housing Improvement Programme.

The report recommends that “care, support and supervision” (an Exempt Accommodation rule criterion) should be defined and that regulations around rent levels and subsidy rules should be reviewed. The temptation to use this as a means of exercising cost control rather than Value Generation must be resisted. It might sound a bit “old hat” of me to say that investment in preventative services such as supported housing saves a fortune in otherwise avoidable statutory interventions, but it’s still true. The point should be to deny revenue to dodgy operators, not restrict revenue to good ones.

The report also reflects the National Statement of Expectations for Supported Housing in saying that local authorities should be able to intervene to stop new supported housing supply where it is unnecessary or of poor quality. Many local authorities have set up “gateway” arrangements which prospective supported housing providers have to go through, rather than just setting up and applying for enhanced Housing Benefit.

Rather confusingly, the report claims that “local authorities’ oversight of support is currently limited by existing regulation….”. It seems to me that there is a distinct difference between regulation on the one hand (and the supported housing sector has several regulators) and oversight on the other, which pretty much doesn’t exist. In my view, ALL supported housing providers should be subject to local accreditation as they were during the Supporting People initiative. No accreditation should mean no funding.

Oversight should be based on an independently developed and implemented oversight system based on Value Generation principles.

Given the prominence of some registered providers in what has become the exempt accommodation industry, the Regulator of Social Housing (RSH) in England has sanctioned several exempt accommodation registered providers. The modus operandi of some of those registered providers is to use associated private companies to charge large amounts of money often for unspecified services to supported housing providers (both good and bad) that work as their agents. Let’s do the maths here; if for example, a registered provider has 5000 agency managed bed spaces and an associated private company charges 10% of the rent roll to those agencies (for unspecified services that may not be provided), given an average weekly enhanced Housing Benefit charge of, say, £200 a week, it’s making £5.2 million per year. Where is this money going?

Thus far the RSH has claimed it has no control over third party organisations associated with registered providers, even in circumstances of apparent “disguised profit”. However, that is about to change as a consequence of legislative changes to sections 107, 108, 203 and 208 of the Housing and Regeneration Act 2008, which will give the RSH “look through” powers to demand that registered providers explain where money that has left the regulated sector has gone, and not before time.

The UK government DLUHC is currently conducting an Inquiry into Exempt Accommodation. You can see my submission to that enquiry here. The thrust of my submission is that Exempt Accommodation as a concept should be abolished, that enhanced Housing Benefit should be abolished and replaced with “Supported Housing Rent“, which is an uncapped housing component of Universal Credit, that all supported housing providers should be accredited at local level (as they were under “Supporting People”) and that there should be an independent oversight system for Supported Housing  based on Value Generation principles.

At time of writing the Inquiry is ongoing, but we will be updating you on any progress it makes at our supported housing conference 2022 which, I repeat, is a free event. At time of writing, we have 800 bookings across the six separate components of the conference.

The Exempt Accommodation Project.

One of the serious implications of the abuse of the Exempt Accommodation rules and enhanced Housing Benefit is that local authorities have, in many cases, implemented quite stringent interpretations of the National Statement of Expectations for Supported Housing by making it much harder for supported housing providers to claim enhanced Housing Benefit. I can quite understand their position, but it affects genuine supported housing providers as well as their dubious counterparts.

In addition to making it harder to claim enhanced Housing Benefit, some local authorities have told supported housing providers to register as registered providers. This is because where a registered provider is the landlord a local authority can recover from the DWP all the enhanced Housing Benefit it pays. Where a charity or voluntary organisations the landlord in an exempt accommodation/enhanced Housing Benefit claim, the local authority can only recover 60% of the difference between the Local Housing Allowance rate and the amount of the claim, so the local authority will lose a lot of money if it pays the claim.

However, the RSH has an effective embargo on registering new supported housing registered providers, again due to the conduct of those wrongly motivated supported housing registered providers, many of which have been sanctioned by the RSH.

Our solution to this is the Exempt Accommodation Project, which brokers relationships between reputable supported housing providers and reputable registered providers to enable local authorities to pay reasonable, well-founded enhanced Housing Benefit claims without loss of subsidy.

Talk To Us

If you represent a reputable supported housing provider struggling to claim enhanced Housing Benefit, or a reputable registered provider willing to take a short-term lease on a supported housing provider’s property for a good revenue stream please contact us.

Finally, if you’re looking for values driven professional consultancy advice and support in supported housing, please get in touch.

Categories
Finance & Funding

Problems Claiming Enhanced Housing Benefit?

What’s The Problem?

Charities, voluntary organisations and registered providers (housing associations) that provide supported housing and/or tenancy sustainment services are entitled to Enhanced Housing Benefit to provide Intensive Housing Management. However, all things are not equal and some organisations are, in practice, more entitled than others.

If your organisation has decided to set up supported housing in a local authority area without consulting with the local authority in question, don’t be surprised if you’re refused Enhanced Housing Benefit. We’ve been involved in Enhanced Housing Benefit claims since 2005 and we reinvented the term “Intensive Housing Management”, but we don’t represent supported housing providers that operate without the approval of local authorities.

However, there is no guarantee even if your organisation is entitled to Enhanced Housing Benefit and that you operate with local authority approval that will be successful in claiming it.

I metioned that all things are not equal. A registered provider/housing association landlord usually has fewer problems in obtaining Enhanced Housing Benefit because, in such cases, the local authority can fully recover from the DWP the Enhanced Housing Benefit it pays to registered providers.

In the case of a charity or voluntary organisation the local authority can only recover 60% of the difference between the Local Housing Allowance level and the amount of the Enhanced Housing Benefit claim. Small wonder then that charities and voluntary organisations are finding it harder and harder to claim Enhanced Housing Benefit.

We hear increasing numbers of situations where charities and voluntary organisations that provide supported housing are being told by local authorities that they must become registered providers in order to qualify for Enhanced Housing Benefit and/or be included on local framework agreements.

For most charities and voluntary organisations, applying to become a registered provider is akin to trying to get the proverbial camel through the eye of a needle. However, we understand why local authorities have a problem over subsidy loss due to Enhanced Housing Benefit claims they can’t fully recover, even though the “get registered as a registered provider” solution is a non-starter for the vast majority of supported housing providers.

So What’s The Solution Then?

In short the solution is the Exempt Accommodation Project which we set up earlier this year.

The Exempt Accommodation Project seeks to match non-registered supported housing providers, irrespective of their legal identity (charity, voluntary agency, private provider) that own or lease their properties with compatible registered providers in a more equitable way than traditional registered provider/managing agency agreements. The properties in question are then leased by the supported housing provider to the registered provider on a 5-7 year basis. As a consequence, local authorities can fully reclaim the Enhanced Housing Benefit they pay, because a registered provider is the landlord.

Since we set the Exempt Accommodation Project up we have been inundated with interest from providers and local authorities. We’ve also been successful in attracting a number of small, community-based registered providers to act as landlords by taking a short-term lease on supported housing providers’ properties.

These registered providers must, as a minimum, be responsible for:

  • Voids
  • Health & Safety
  • Tenant satisfaction
  • Administration of occupancy
  • Physical property standards

For managing the above, usually via the HB eligible (and otherwise entirely free) Cloudigs supported housing management system, the registered providers are paid around £20 per tenant per week. That’s over £100k per year, assuming 100 units of accommodation, the local authorities can then fully reclaim the Enhanced Housing Benefit they pay and supported housing providers have fewer problems in claiming Enhanced Housing Benefit, which we do for them anyway. We also provide the lease and management agreement templates for the registered providers and supported housing providers to use. Our costs, which are minimal, are charged to the Enhanced Housing Benefit claim. So what’s not to like?

The Exempt Accommodation Project is happy to take on more local authority approved providers, but we’re especially in need of community-based registered providers that would appreciate a generous revenue stream whilst making a major contribution to solving their local authorities’ subsidy recovery problems.

So whether you’re a supported housing provider struggling with Enhanced Housing Benefit claims, a registered provider looking for a good revenue stream whilst generating huge value for your community or a local authority looking for a subsidy recovery solution, please talk to us. The Exempt Accommodation Project won’t cost you anything, but it will gain you a lot. It’s what you call a “no-brainer”.

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Categories
Finance & Funding Policy

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

supported housing head image

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

Exempt Accommodation Project Flowchart
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

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

Categories
Uncategorized

The Exempt Accommodation Project

The Exempt Accommodation Project
The Exempt Accommodation Project

Background

We have recently been contacted by a large number of non-registered supported housing providers (i.e supported housing providers that are not registered providers/housing associations) who tell us that their local authorities require them to become registered providers of social housing in order to be able to be included on the local framework agreements and in order to qualify for Enhanced Housing Benefit.

We are also aware, as per my recent blog post, that some local authorities are restricting Enhanced Housing Benefit payments to non-registered providers to levels well below those paid to registered providers. This is because local authorities can only fully reclaim from the DWP the Enhanced Housing Benefit they pay to registered providers.

Add to that the fact that private-sector providers have never been entitled to Enhanced Housing Benefit and what we have is a three-tier system in which:

  • Tenants of registered provider supported housing can receive full Enhanced Housing Benefit entitlements
  • Tenants of nonregistered supported housing providers receive partial Enhanced Housing Benefit entitlements
  • Tenants of private sector supported housing providers receive no Enhanced Housing Benefit at all

It simply wrong and discriminatory that tenants’ entitlements to Enhanced Housing Benefit, which is a personal benefit, are dependent on the legal identity of their landlord.

The Exempt Accommodation Project

The Exempt Accommodation Project is a way of helping local authorities to properly fund supported housing via Intensive Housing Management/Enhanced Housing Benefit without losing subsidy and without requiring non-registered providers to register as registered providers (housing associations).

The Exempt Accommodation Project is, of necessity, a means of tinkering with the existing system, which is based on the exempt accommodation rules. However, the UK government, having already said that supported housing will continue to be funded through the welfare system, should make the housing component of Universal Credit unrestricted for supported housing so that the true cost of supported housing can be met through a “Supported Housing Rent“. This should be payable to all supported housing providers, irrespective of their legal identity, provided they generate value[1] however, the wheels of state turn slowly so until that happens, we have the Exempt Accommodation Project.

How does the Exempt Accommodation Project work?

The Exempt Accommodation Project seeks to match non-registered supported housing providers that own or lease their properties with compatible registered providers in a more equitable way than traditional registered provider/managing agency agreements. The properties in question are then leased by the supported housing provider to the registered provider, usually on a short-term lease with break clauses. As a consequence, local authorities can fully reclaim the Enhanced Housing Benefit they pay, because a registered provider is the landlord.

  • The registered provider is paid (via the Enhanced Housing Benefit claim) for what it does, which will vary depending on what, if anything, the supported housing provider needs. This is likely to appeal to smaller, community-based registered providers for whom the additional income could be a game-changer.
  • The supported housing provider is also paid for what it does via the same Enhanced Housing Benefit claim, which will be more secure because the local authority can recover it from the DWP.
  • Maintenance can continue to be provided by the supported housing provider or subcontracted to a specialist supported housing maintenance provider, or the registered provider can do it, depending on what works best for the supported housing provider.
  • We provide the necessary leases/subleases and management agreements
  • We calculate and negotiate the revised Enhanced Housing Benefit claims.
  • It won’t cost you anything. The Exempt Accommodation Project charges a small fee to the rent for the duration of the arrangement, which is fully recoverable from Enhanced Housing Benefit in any case..

Supported housing providers and registered providers can choose who they work with and what components of the Exempt Accommodation Project structure they need.

Supported housing providers and registered providers that want to get involved will need to show that they generate value. They will need to show that they operate through recognised referral pathways and that they are legitimate providers as far as the local authorities are concerned.

The Exempt Accommodation Project is not an invitation to dubiously motivated opportunists to access Enhanced Housing Benefit. It is an opportunity for genuine supported housing providers and registered providers to operate with the financial and strategic approval of local authorities and to enable those local authorities to fully recover the Enhanced Housing Benefit they pay.

We are setting up a database of providers and registered providers in order to match one with the other. Matching may initially be done on the basis of geography; however, this may be less important than “cultural fit”. For example, some registered providers may prefer to work with non-profit supported housing providers. Others may be comfortable with private sector supported housing providers. Irrespective of legal identity supported housing providers must generate value, as must the registered providers.

It’s then up to the supported housing provider and registered provider to agree who does what and how the revenue is split. This is a discussion we can facilitate if that’s helpful. The split of roles can vary. Many supported housing providers that own or lease their property will want the registered provider to have a “light touch/arms-length” role. Others will want a greater level of registered provider involvement and the revenue would be split accordingly.

[1] Value Generation has 3 components: outcomes for people; cost benefit to the public purse & wider social and community benefit

Exempt Accommodation Project Structure

We have a management agreement template that can be adjusted to reflect the parties’ respective roles and the split of revenue.

We have lease and sublease models that can be used to enable the registered provider to take (typically) a 5–7-year leasehold interest in the supported housing providers’ properties with mutual break clauses.

We recommend a bespoke cloud-based supported housing management system (developed by a supported housing provider) that enables the registered provider to fulfil its regulatory oversight responsibilities and enables the supported housing provider to manage its housing and support roles. This costs just a few pence per day per occupied bed space and is Housing Benefit eligible.

We have links to a specialist supported housing management and maintenance provider if the supported housing provider isn’t resourced to do these things.

Management agreement relationships where the registered provider owns the property can be quite unequal. The Exempt Accommodation Project is intended for supported housing providers that own or lease their own property to work with registered providers on a more equal basis.

The Exempt Accommodation Project can also be a way of putting together registered providers and supported housing providers who want to discuss wider strategic partnerships and/or mergers.

As well as facilitating the entire structure of the of these arrangements (introductions, agreements, supported housing management system, maintenance options) we also revise the Enhanced Housing Benefit claims to take account of the (small) costs involved.

This idea generates huge value for local authorities, registered providers, supported housing providers and for residents of supported housing.

Getting Involved

Please get in touch if:

  • You’re a supported housing provider that needs secure Enhanced Housing Benefit revenue and eligibility to be included on local authority framework agreements, or you’ve been told to register as a registered provider
  • A registered provider that needs additional income or is interested in partnerships or mergers with supported housing providers
  • A local authority that’s looking to manage the local supported housing market in such a way as to generate value without loss of Housing Benefit subsidy

We already have a growing list of supported housing providers and registered providers on the Exempt Accommodation Project database. Please become part of this.

Michael Patterson

June 2021

Categories
Uncategorized

Why are some local authorities restricting enhanced Housing Benefit payments to charities & voluntary agency supported housing providers and/or forcing them to apply to become registered providers?

Introduction

Some months ago, I published a briefing on the National Statement of Expectations for Supported Housing and predicted, amongst other things, that it might tempt some local authorities to try and restrict the amounts of Enhanced Housing Benefit payable to supported housing providers, and also to try and limit the number of supported housing providers setting up new services.

In respect of the latter point it certainly the case that local authority should commission[1] supported housing that reflects well researched local priorities, and consequently not commission supported housing that doesn’t do so. In addition, local authorities should not commission supported housing that doesn’t generate value[2]. There are too many wrongly motivated people trying to make a quick buck from public money, and we need to see the back of them.

New Developments

In respect of the former point (i.e. restricting Enhanced Housing Benefit) we are beginning to see disappointing examples of some local authorities imposing blanket restricted Enhanced Housing Benefit levels on non-registered provider supported housing (i.e., voluntary organisations and charities). This has nothing to do with matching resources to needs. It’s just crude cost control being exercised at the expense of supported housing and the people it houses and supports. It means that people in non-registered provider supported housing will suffer lower levels of staffing, services and maintenance whilst people with the same additional needs in registered provider owned supported housing generally won’t. This is an iniquitous situation in which peoples’ entitlements to proper levels of service depend on the legal identity of their landlord, which is absurd. This situation must and will be challenged.

The reason that some local authorities are doing this is because they can only fully recover from the Department of Work and Pensions, the Enhanced Housing Benefit they pay when the landlord is a registered provider[3]. However, that is not a justification for discriminating against supported housing providers and residents simply because their landlord isn’t a registered provider.

We have seen other examples where local authorities insist that non-registered provider supported housing providers must apply to become registered providers as a condition of being eligible to be commissioned as local supported housing providers via framework agreements and other mechanisms.

This is for the same reason as that which “justifies” the blanket implementation at local level of restricted Enhanced Housing Benefit payments at well below the amounts paid to registered provider supported housing providers. Some local authorities don’t want to lose subsidy on non-registered provider supported housing providers no matter how much value those providers generate and no matter how important their services are.

There may be good reasons for some supported housing providers to apply to the Regulator for registration but enabling a local authority to fully recover Enhanced Housing Benefit subsidy isn’t one of them. I assume that the various UK housing regulators (Housing Benefit being a non-devolved issue) will have a view on this? The English Regulator of Social Housing in particular is currently very cautious about applications for registered provider status from supported housing providers. Did English local authorities talk to the Regulator of Social Housing before putting in place these requirements for registration as a condition of being commissioned locally?

I do understand that local authorities don’t want to lose subsidy as a consequence of regulations that treat different supported housing providers differently depending on whether or not they are registered providers. I don’t understand why those local authorities would choose to reinforce that difference by imposing blanket artificial Enhanced Housing Benefit maxima on non-registered providers and/or insist that such providers become registered providers. This is a myopic exercise in cost control that does nothing to support the development of good quality supported housing and does much to prejudice it.

A Solution

We actually need a wholesale redesign of the system for funding supported housing (see my blog post on this from 2020: https://supportedhousing.blog/2020/06/03/funding-supported-housing) but the wheels of state turn slowly and until we get structural change we need to tinker with the existing system. There is a shorter-term solution to this problem that would enable local authorities to recover the Enhanced Housing Benefit they pay in full without trying to force providers down the road of registration or restricting providers to unsatisfactory local Enhanced Housing Benefit maxima. Notwithstanding the fact that the Regulator of Social Housing is likely to rebuff applications for registration made purely on the basis that local authorities need to fully recover Enhanced Housing Benefit.

Please see The Exempt Accommodation Project homepage for more information about the solutions to this problem, then read on below.

Non-registered provider supported housing providers that own or lease their properties should consider leasing such properties to willing registered providers. Typical registered provider/agency relationships are based on arrangements where the registered provider owns the properties and the Management Agreement between the parties reflects that. However, where the provider agency has the legal interest in the property (it owns it or holds the head lease) the Management Agreement should reflect this fact. The Registered provider’s role here is to facilitate the ability of local authorities to fully recover the Enhanced Housing Benefit they pay, to ensure the properties concerned are up to the standards expected by the Regulator and to ensure that occupancy agreements are properly administered.

Aside from that, the provider agency can do everything else, including setting the rents and providing the maintenance services. It might want to subcontract maintenance, for example, to the registered provider on an “actual costs” basis but it shouldn’t have to, especially if it has previously maintained its own buildings.

The registered provider in such an arrangement would be paid an admin fee (say £20-£25) per tenant/licensee per week, which is claimable via Enhanced Housing Benefit. This might not be of interest to larger registered providers that have bigger fish to fry (although it might be). What I have in mind are smaller, community-based registered providers that would benefit from what could be quite significant levels of additional revenue. If a non-registered provider leased 50 units of supported housing to a registered provider with an admin fee of £25 per unit per week, that equates to £65,000 per year.

Please get in touch

So, this blog post is an appeal to non-registered providers and community-based registered providers to think about this. We have developed a lease model and a Management Agreement model to reflect these arrangements, so no one is going to have to reinvent the wheel. Furthermore, we can handle the revised Enhanced Housing Benefit claims to include the admin fee.

We have plenty of non-registered provider supported housing providers looking for willing registered providers, although we would happily talk to more. What we don’t have are the willing registered providers in sufficient numbers and locations so we are especially interested in hearing from registered providers who may have an interest in this, as well as providers looking for registered provider partners: michael@michaelpatterson.co.uk.

[1] To “commission” a supported housing service doesn’t necessarily mean to fund it as well in this context. It means to approve and/or recognise it as meeting assessed local need.

[2] Value Generation has 3 principles: outcomes for people; cost benefit & wider social/community benefit.

[3] If the landlord is not a registered provider (i.e. a voluntary agency or a charity) the local authority can only recover 60% of the difference between the appropriate Local Housing Allowance rate & the actual rent being charged.

Categories
Finance & Funding

Intensive Housing Management & Enhanced Housing Benefit

supported housing finance
claiming enhanced housing benefit for supported housding

A List of Routinely Eligible Intensive Housing Management Tasks & Functions

Updated November 2023

In May 2022 the DWP issued “Housing Benefit guidance for supported housing claims“. This Guidance is important in that it places the emphasis for eligibility for enhanced Housing Benefit on specifically property-related tasks and functions.

It also provides an inexhaustive list of what it deems to be eligible tasks, which I have added to my longstanding list below, to the extent to which both lists have different items.

Please be mindful that just because a task, activity or function is listed here it doesn’t necessarily mean that a local authority Revenues & Benefits Team will agree to fund it, or even agree that it’s eligible in principle. Different authorities take different views, but what I have listed below are things that are routinely accepted as eligible.

Enhanced Housing Benefit for Intensive Housing Management is a complex area. It’s based on regulation and case law and is subject to change. Landlords seeking Enhanced Housing Benefit to fund Intensive Housing Management services must comply with the Exempt Accommodation rules. The amounts claimed should reflect the reasonable costs of providing eligible services to people who have been genuinely assessed as needing Intensive Housing Management.

Claims for Enhanced Housing Benefit are rightly subject to scrutiny by local authorities, and the level of scrutiny is increasing as a consequence of abuses of the system by some unscrupulous individuals and organisations. The National Statement of Expectation for Supported Housing (England only) encourages local authorities and their strategic partners to ‘manage the supported housing market’. In practical terms this involves ensuring the quality of supported housing providers and controlling Enhanced Housing Benefit costs.

In May 2022 the DWP published “Housing Benefit Guidance for Supported Housing Claims“. This guidance has led to increased levels of srutiny of enhanced Housing Benefit claims and a stricter interpretation of eligibility, such that the emphasis is very much on property-specific tasks and functions.

This revised guidance also needs to be seen in the context of the UKUT hearing Allerdale BC v JD, the summary of which states: “What constitutes “general counselling or..any other support services” within paragraph 1(f) of schedule 1 to the HB Regulations 2006 must be assessed with regard to the legislative history of that provision. There is no automatic linkage between schedule 1(f) and the definition of “exempt accommodation” in the HB and CTB (Consequential Provisions) Regulations 2006.” In other words the term “support” does not necessarily have the same meaning within each of those separate regulations, such that “support” within the meaning of “general counselling or..any other support services” is not eligible to funded by Housing Benefit, but that “support” within the definition of exempt accommodation (i.e. “care, support and supervision”) may be eligible, depending upon what that support is.

If you are seeking Enhanced Housing Benefit for Intensive Housing Management you should be an existing, qualifying supported housing provider. If you are a new supported housing provider you should have established referral pathways and be acting with the specific approval of commissioners.

You might be an excellent supported housing provider that provides excellent services to people with additional needs. This doesn’t guarantee that a local authority will agree to pay you Enhanced Housing Benefit, but we can help you in the construction, submission and negotiation of claims.

Context

Intensive Housing Management that is routinely eligible for Enhanced Housing Benefit is split into two broad areas and includes both staff and non-staff costs:

  • General needs housing management and maintenance functions that are more intensively provided as a consequence of the additional needs of supported housing residents
  • Additional or intensive housing management and maintenance functions and tasks that would not be provided in general needs accommodation where no additional needs exist. Such tasks and functions include but are not limited to:

Intensive Housing Management List

  • The provision of an alarm (even though alarms are not HB eligible) or the Housing Proactive system (which is HB eligible. Please ask us about this)
  • Controlling access to the premises
  • Ensuring rent is paid regularly and on time.
  • Explaining the occupancy agreement and assisting people to understand their rights and responsibilities in relation to it
  • The additional costs of property maintenance and repair, housing services, furniture, fittings and equipment where the furniture fixtures and fittings do not become the property of the resident
  • Offering advice and guidance on keeping property to a reasonable standard of hygiene.
  • Liaising with all relevant agencies, both statutory and voluntary, on the tenant’s behalf to the extent that it concerns their ability to maintain/develop independence in relation to their housing.
  • Assisting people to reduce rent arrears.
  • Dealing with nuisance issues.
  • Ensuring that people know how to use equipment safely.
  • Providing people with advice and facilitating a move to alternative accommodation as required.
  • Assisting people to claim the housing component of Universal Credit
  • Helping to keep people safe by monitoring visitors, including contractors and professionals, and by carrying out health and safety, maintenance and risk assessments of property.
  • Internet access within sheltered and supported housing.
  • PPE.
  • Support/IHM worker, concierge, caretaker or warden staff – only allow the proportion of the charge for the time they are providing HB eligible accommodation-related services
  • The overhead costs of providing HB eligible services (office costs, IT, travel, telephones, stationary etc)
  • Refuse removal of communal bins
  • External cleaning of tenant’s windows where the tenant does not live on the ground floor
  • Ongoing maintenance (including repair, cleaning and utility) of:
    • communal grounds (including basic gardening and lighting for areas of external access)
    • communal laundry facilities
    • internal communal areas
    • cleaning of windows in communal areas and of individual’s accommodation above ground floor level where they are unable to do it
    • communal lifts
    • communal telephone (excluding the cost of calls)
    • secure building access, including entry phones, key-cards and keypad door locking mechanisms

If you do any or all of the above in sheltered and/or supported housing on a “more than minimal” basis and you are an eligible provider (see paragraphs 4 and 8 above) then you should be eligible to claim Enhanced Housing Benefit

If you are a local authority approved supported housing provider and you want advice and assistance in claiming Enhanced Housing Benefit please get in touch.