Categories
Policy

The National Statement of Expectations for Supported Housing

Introduction

It has been five years since the 2015 Comprehensive Spending Review suggested changes to the regulation and oversight of supported housing. The National Statement of Expectations for Supported Housing published on 20th October 2020 is an underwhelming development after this five year wait, albeit that the 2018 decision to continue funding supported housing from the welfare system, rather than a local authority commissioned funding model to top up Local Housing Allowance rates of Housing Benefit, was a welcome hiatus.

We knew that MHCLG and DWP were going to focus on:

  • Controlling Housing Benefit costs
  • Exploring sector led accreditation and benchmarking for supported housing
  • Identifying local authorities’ strategic planning frameworks for supported housing, resulting initially in the draft National Statement of Expectations published in 2017 as part of the “Funding Supported Housing” consultation and policy statement.
  • Examining enhanced regulation for supported housing

Publication of the National Statement of Expectations for Supported Housing is well overdue after having been flagged up as a UK Government intention over two years ago as part of the “Funding Supported Housing” proposals of 2018 and the draft National Statement of Expectations of 2017.

Added to that is the increasingly urgent and understandably strident tone of various parties demanding that supported housing, or at least the “exempt accommodation sector” should be regulated. Thea Raisbeck’s important “Exempt From Responsibility?” report focusses on this and more.

I agree. I have said so often, for example, my blog post of June 2020. For me, any regulatory and oversight frameworks for supported housing have to be based on Value Generation principles:

  • Outcomes for people
  • Cost benefit
  • Wider social and community benefit

Regulation and Oversight

Regulation should apply to how an organisation is structured, managed and financed. Oversight, in contrast, should apply to what it does, in this case the delivery of supported housing.

There is already a multiplicity of regulators in the supported housing sector, none of which in my opinion has a complete grasp of the nature of supported housing. There are also many supported housing providers that are entirely unregulated. Add to that the vexed question of who oversees what supported housing does, regulated or not?

The National Statement of Expectations for Supported Housing is not about regulation, it’s about oversight. It’s not about many of the services provided to people in supported housing, it’s about the accommodation itself and tenancy related services, the latter being Intensive Housing Management funded by enhanced Housing Benefit.

It’s also “guidance”. It relies on the statutory sector for its implementation and without additional funding it will have very little meaningful impact on how supported housing is overseen. This is a missed opportunity.

Having made clear that this Statement of Expectations is about oversight not regulation, it then makes clear that it’s about the oversight of supported housing accommodation not supported housing services. To be frank, it’s not really about oversight at all. It should oversee what supported housing does and how, not just where it does it.

Jurisdictional Scope

The National Statement of Expectations for Supported Housing doesn’t make clear to whom it applies in UK jurisdictional terms. It’s a UK Government document but to the extent it mentions regulators it only mentions English regulators. The Housing Benefit about which it talks a lot is a non-devolved function. So, is this England only or is it, at least in part, UK wide? At least one of the examples of good practice used is from a Scottish housing provider.

Analysis

When a policy pronouncement of this potential significance is made, I would usually undertake a line by line analysis. I did begin to, but rapidly came to the conclusion that you’d lose the will to live after the nth vague exhortation by UK Government that local authorities should be “encouraged” to do stuff that was originally set out in the draft National Statement of Expectations of 2017.

I have therefore tried to summarise the UK Government’s “wish list” and to contextualise it by referring to what might have been.

The National statement of Expectations for Supported Housing is divided into two main sections:

  1. Assessing local need and planning effectively to meet demand
  2. Delivering accommodation which is safe, good quality and value for money

Assessing local need and planning effectively to meet demand

The National Statement of Expectations for Supported Housing says that there should be collaboration between statutory sector agencies, including revenues and benefits teams, which should enable us to see that this is partly about controlling Housing Benefit costs in the specified/exempt accommodation sector.

I entirely agree that providers should collaborate with local authorities in the development of new supported housing. There are too many entirely unregulated supported housing providers setting up independently of commissioners and then applying for enhanced Housing Benefit.

Local authorities are “encouraged” to

  • Implement oversight arrangements
  • Undertake accommodation needs assessments
  • Map supply against current and future demands (as per the 2017 draft National Statement of Expectations)
  • Identify additional funding requirements.

Local authorities are not being given new money to do this and it isn’t a statutory requirement it’s just guidance, so there are no prizes for guessing what the likely upshot of this will be.

Providers of supported housing are exhorted to ensure safe and good quality housing, including the use of “the most secure form of tenancy/licence compatible with the purpose of the supported housing”.

Local authorities should ensure “value for money” by sharing data and benchmarking within and across local authority boundaries. Maybe you’ll forgive me for hoping that this is more about generating value (see the definition of Value Generation in the Introduction) than just crudely controlling costs, which often achieves the opposite effect. Restricting investment in prevention simply causes more human suffering and the much higher costs of subsequent, and otherwise avoidable, statutory health, social care and criminal justice interventions.

The National Statement of Expectations for Supported Housing is right to say that enhanced Housing Benefit claims should be no higher than the cost of providing eligible services that people need, but the likely outcome of what may be chalk and cheese comparisons of different supported housing services to establish local benchmarks may simply be to restrict the amounts payable on the basis of false comparisons. In other words, it may well be more about controlling costs than meeting peoples’ needs or generating value.

The National Statement of Expectation for Supported Housing provides a comprehensive list of (English) statutory and other agencies which should be involved in assessing needs and planning supported housing. It refers to the National Planning Policy Framework (which applies to England only, by the way) and makes reference to the need for “cross authority arrangements”. The latter have been with us in spirit but alas, rarely in physical form since the days of Supporting People.

Delivering accommodation, which is safe, good quality and value for money

The National Standards of Expectations for Supported Housing document refers to a checklist of existing legal requirements and suggested standards for accommodation and “tenancy related housing services” (presumably a reference to Intensive Housing Management funded by enhanced Housing Benefit). These are in Annexes A and B of the document.

Rather predictably much of the focus on “oversight” is around controlling Housing Benefit costs. I’m very much in favour of ensuring that enhanced Housing Benefit is paid at a rate equivalent to the reasonable costs of providing Housing Benefit eligible services that supported housing residents need. To do so is a good investment in prevention and enablement. I am not in favour of reducing enhanced Housing Benefit payments down to artificial maxima established on the basis of false comparisons between different supported housing services as a means of cost control. I’m also bitterly opposed to paying any Housing Benefit whatsoever to contrived supported housing arrangements set up by ill-motivated people to milk the system at the expense of people with additional needs and of the public purse.

I return again to the notion of Value Generation. Sometimes the enhanced Housing Benefit costs of supported housing seem high, whether it’s paid to Specialised Supported Housing (see page 4 of the hyperlinked document for a definition) or other forms of supported and sheltered housing. However, other services for people with additional needs are often far more expensive, and if supported housing generates value:

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

then enhanced Housing Benefit, which equates to what it reasonably costs to provide eligible services, generates a lot of value as well. To use the National Statement of Expectations for Supported Housing to artificially suppress enhanced Housing Benefit entitlements would be a myopic mistake.

The exhortation within the National Statement of Expectations for Supported Housing for commissioners and revenues and benefits departments to work together is both welcome and overdue. I am familiar with too many examples where commissioners give strategic support to a supported housing service (even if they’re not funding it) but revenues and benefits departments refuse enhanced Housing Benefit payments. This is most frequently because they can’t fully recover the amount of the proposed charge from the DWP, which is jointly responsible for the National Statement of Expectations for Supported Housing by the way.

In addition, I’m familiar with so-called supported housing services that are awarded enhanced Housing Benefit by revenues and benefits departments, even though these services are set up without reference to commissioners. Mercifully, this situation is increasingly less common now.

As I said in my introduction to this briefing, the UK Government was thinking about sector led benchmarking and accreditation schemes. My own view is that oversight should be conducted by an externally developed framework for accreditation and quality, based on Value Generation principles. In my “Oversight of Supported Housing” blog post I set out the basis for such a system, to be developed by a University or think tank and implemented by the same agency independently of commissioners/funders and providers, although they would inform its shape and nature according to Value Generation principles. The measurement of the value of supported housing must be independent of the people who fund and provide it.

The National Statement of Expectations for Supported Housing proposes a Supported Housing Sector Scorecard, an initiative apparently being led by the National Housing Federation but about which there is little in the public domain. Its development has been delayed for understandable pandemic-related reasons. What is less understandable is the apparent lack of openness about its development, with organisations simply being asked to email the coordinating agency to participate.

It’s based on the more general Sector Scorecard for social housing, the vast bulk of the reports from which are quantitative not qualitative. For supported housing in particular, qualitative data really matters because how people feel about supported housing can often not be measured in quantitative terms, neither can much of its wider social and community benefit. Forgive me for reminding you again of the three Value Generation principles:

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

Of these three the first and the third principles need to be measured qualitatively lest we become preoccupied with the cost of everything and the value of nothing.

Conclusions

The National Statement of Expectations for Supported Housing has been a long time in the making. It hasn’t changed that much from the draft National Statement of Expectations of 2017 and is disappointing in its scope.

Its focus is on the oversight of the buildings in which supported housing is provided and on “tenancy-related services” only (presumably another term for Intensive Housing Management). It doesn’t concern itself with regulation.

Existing regulators in the sector have neither the scope not the expertise to regulate what supported housing does nor the mandate to oversee it. Given the extent of additional need that supported and sheltered housing is now expected to meet we’ve been let down here. Much of what the sector does will remain inadequately overseen and unregulated.

It seems to me that the primary thrust of the National Statement of Expectations for Supported Housing is the control of enhanced Housing Benefit expenditure. It is certainly true that we should be very careful about who is paid enhanced Housing Benefit. That is a very different thing from artificially restricting such payments to genuine, value generating supported housing providers. We have an opportunity and a necessity to separate the supported housing sheep from the goats and the National Statement of Expectations for Supported Housing manifestly fails to help us do this.

To the extent to which the National Statement of Expectations for Supported Housing identifies useful things, for example, coordination between revenues and benefits teams and commissioners, wider involvement of other statutory agencies, strategic planning and the mapping of supply and demand for supported housing, it does nothing to enable these things. It’s only guidance and provides no new funding for implementation and as such it’s a recipe for inaction save for the focus on restricting enhanced Housing Benefit.

The framework for the oversight of supported housing should be developed and implemented independently of commissioners and providers, albeit with the latter’s significant input. There has to be a separation between the measurement of quality on the one hand and the funding and delivery of supported housing on the other.

Moreover, the oversight of supported housing should be conducted according to Value Generation principles, which have their own internal cost/quality checks and balances.

Michael Patterson

October 2020

Categories
Finance & Funding Policy

Working Together to Develop New Supported Housing

A Bit of Background

One of the issues that has preoccupied me lately is the way in which private and institutional capital has been and is being introduced to the sector to fund supported housing for people with often high levels of additional need.

Let me be clear; I’m very much in favour of this, but it’s important that it’s done properly by investors, commissioners, housing associations and care and support providers.

You’ll probably be familiar with my emphasis on Value Generation principles

  • Outcomes for people
  • Cost benefit to the public purse
  • Wider social and community benefit

It’s important that all parties have a common values base, such as Value Generation, if we are all involved with services for people with additional needs. If supported housing is developed without common values between the parties involved, the people who pay the price of failure are those who live in it and those who work directly with them to do so.

Private Capital for Supported Housing

Supported housing funded through private capital is a relatively immature “market” and the record so far is a patchy one.

Investors are being offered a good deal here if they’ve done their homework, they know they’ll get a safe long-term return on their investment. That return should be measured in single figure ROI percentages, yet commissioners tell me of investors seeking excessive double-digit percentages whilst some “aggregators” walk off with huge commissions.

If the bottom line is all that matters, then you’re dealing with the wrong sector. To the extent that supported housing is “market” it’s a social one, and your social purpose has to underpin your investment. There are some really good socially oriented investors out there and they’re looking for commissioners who need supported housing. There are housing associations that understand what their role should be and providers with the capacity and vision to take on a wider role, for example, direct responsibility for day-to-day and reactive maintenance as well as direct support to residents.

The Role of Housing Associations

Housing associations are a necessary part of the mix here and, in many cases, they don’t actually provide much or any intensive housing management and support to people who live in supported housing (who are their tenants). This is more often done by specialist providers, but not always: some housing associations are also providers in their own right.

There are different types of housing associations. The “REIT” (Real Estate Investment Trust) based housing associations are there to enable local authorities to fully recover from the DWP the enhanced Housing Benefit they claim for supported housing, and to be a regulated presence that should provide comfort to commissioners and others involved in the development of privately funded supported housing.

REIT-based housing associations need to be independent of capital finance providers, not just a vehicle for enhanced revenue. We should be entitled to expect them to manage their finances and conduct their governance in accordance with a social model of operation. They claim significant levels of public funding in the form of enhanced Housing Benefit, which is a personal benefit of their residents. They should make proper provision for the operation of the housing for which they are responsible, including the creation of maintenance sinking funds and other operational costs. They should remunerate their people on the basis of the value they generate within a social market.

The English Social Housing Regulator recently investigated a number of REIT-based housing associations that develop supported housing with the use of private capital and operate on the basis of public revenue (enhanced Housing Benefit). Regulatory judgements were issued on a number of these. Without commenting on specific cases, it seems to me that the Social Housing Regulator may have rightly censured some but did so without publicly identifying whether any individuals involved made significant personal financial gain. To some extent the Regulator may have also thrown the baby out with the bathwater by criticising other REIT-based housing associations that develop and operate very good supported housing and generate significant value.

Community-based or “traditional” housing associations are typically different from REIT-based associations as they’re not primarily vehicles for the introduction of private capital. What I would like to see is a model where these community-based housing associations act to facilitate the introduction of private capital for supported housing and matching enhanced Housing Benefit because they typically have good governance and operational/financial management.

Sometimes community-based housing associations directly manage supported housing, often they conclude Management Agreements with specialist provider agencies to do so. The agency management route is a well-worn path, but not without its own problems. One of the problems with many housing associations is a common failure to provide sufficiently responsive maintenance services. A broken window in a general needs property may not be deemed to be an “urgent” or “emergency” repair, but in supported housing it often exactly that because of the tenants’ additional needs. The provider agency is usually in a better position to deal with responsive maintenance and in my opinion the Management Agreement should allow for this and the maintenance revenue stream should go direct to the provider agency.

Socially oriented private and institutional investors, commissioners and providers in supported housing would very much value being involved with community-based housing associations, which would take a lease on the supported housing properties. Under such an arrangement, community-based housing associations would enable the claiming of enhanced Housing Benefit such that the local authorities that pay it can fully reclaim it from the DWP.

A Management Agreement would still need to be concluded with the provider agency within which the community-based housing association’s role would be minimal: ensuring that occupancy agreements with their tenants are properly administered by the provider agency and ensuring that the physical environment is of an excellent standard without actually doing the day-to-day maintenance, which would be one of the provider’s roles.

The housing association would receive a management and administration fee and possibly an equity share in the properties as well as plaudits from commissioners and others for acting according to a social purpose.

A Call To Action

I’m prompted to write about this having recently been in discussion with social investors and property developers who are looking for community housing associations and provider partners to work with in the development of new supported housing.

I’ve also been asked to help connect providers with people who fund and develop property for use of supported housing.

  • So if you’re a support provider looking for property for supported housing or the capital to develop it
  • A socially oriented property developer/investor looking for a supported housing provider or a community housing association to work with
  • A commissioner who wants to see the development of good quality supported housing in your area
  • Or a community housing association that’s interested in working with a socially oriented property developer/investor to develop supported housing, with or without an agency support provider

Then please get in touch directly with me and I can put you in touch with my wide network of contacts in the provider, housing association, commissioning and investor/developer sectors.

A Few Words of Caution

On a final, if slightly separate matter: if you’re someone who wants me to help you

  • Set up as a housing association/RP
  • Or a supported housing provider using private property in which you have a personal interest
  • Or you want enhanced Housing Benefit for supported housing that you set up without the active support of local commissioners

Then please DON’T contact me.

Please excuse the slightly tetchy tone but it sometimes gets a little tiresome. I publish blog posts and briefings promoting the need for an integrated and social approach to the development of supported housing, and I then get inundated with requests from private individuals whose intentions have much to do with private profit and little or nothing to do with social value.

I have values (see Value Generation above). They’re important to me and to supported housing in general. I work with people who share those values. I don’t work with people who don’t share those values.

Categories
Finance & Funding

Claiming Enhanced Housing Benefit for Intensive Housing Management

Context

I was recently rereading a Briefing on enhanced Housing Benefit and Intensive Housing Management (also known as enhanced housing management and/or additional housing management), that I wrote for Support Solutions in 2010. I was struck by how relevant and important the information in that Briefing remains today.

Enhanced Housing Benefit is payable to providers of most types of supported and sheltered housing, provided they comply with the Exempt Accommodation rules. If you’re not sure whether your organisation qualifies please ask.

Please be aware that we do not support unregulated private supported housing providers to claim Enhanced Housing Benefit for reasons set out in Thea Raisbeck’s “Exempt From Responsibility?” report.

The reason that Enhanced Housing Benefit is payable is because qualifying supported housing providers provide additional and more intensive housing management and maintenance services than would be the case in general needs rented housing. They do so because supported housing residents have additional housing needs and supported housing itself has additional maintenance and services costs.

What Are Enhanced Housing Benefit & Intensive Housing Management?

There is no definitive list of Intensive Housing Management tasks. We have developed one based on the notion that Housing Benefit will fund tasks which are part and parcel of adequate accommodation, bearing in mind the needs of the residents, and provided these tasks are not funded elsewhere.

Many of these tasks routinely constitute much of a Support Worker or a Scheme Manager’s job description. Housing management functions such as lettings, assistance with claiming Housing Benefit to ensure that rent and service charges are paid, controlling access and facilitating and monitoring site visits from contractors and other visitors/professionals, arranging aids and adaptations, health and safety and risk assessments of property, management, administration, delivery and facilitation of housing services provided, the additional maintenance and services costs……I could go on.

If you are a non-profit provider of accommodation and support and the Intensive Housing Management tasks you perform aren’t funded by another revenue stream, then it can be funded by Housing Benefit. Even better, if you’re a registered provider of social housing (RP) and you provide supported or sheltered accommodation, in which you charge Intensive Housing Management as an eligible service charge, the local authority receives full reimbursement from the DWP in subsidy recovery. This means you’re actually bringing in money to the local area.

This subsidy top-up doesn’t fully apply where non-RPs go down this route. 40% of the difference between what you claim and the Rent Officer determination, which will be similar to the relevant Local Housing Allowance, goes onto the Council Tax bill or is picked up within another local authority budget, such as Adult Social Care. But that’s still a cost-effective way of a community funding a preventative, enabling service.

Why You Should Consider Enhanced Housing Benefit & Intensive Housing Management

It’s a very attractive proposition for RPs and other non-profit accommodation-based support providers for a variety of reasons.

You get full cost recovery on your housing costs which have often been underfunded for years. OK, RPs have an issue with compliance with the Regulator’s Rent Standards (unless its “Specialised Supported Housing”). But that isn’t a problem: Intensive Housing Management costs can be treated as service charge items. You can re-allocate costs and budget headings from rent to housing services where feasible in supported and sheltered housing arrangements.

This enables you to invest in the properties in which people with additional needs live: the physical environment, services and staff. Your support costs can be cheaper because you’ve remodelled your service delivery structure and/or taken some costs out and allocated them (where eligible) to Intensive Housing Management, funded through Housing Benefit. This matters when you bid for support/care contracts because your unit cost for support will be lower without actually reducing your revenue – you’ve just spread the cost.

The Current & Future of Enhanced Housing Benefit & Intensive Housing Management

Having worked with Enhanced Housing Benefit since 2005 you get used to hearing people say, “but it has to end sometime”. Well it hasn’t yet and one of its distinguishing features is its longevity and the fact that case law precedent has established that Intensive Housing Management is eligible for Housing Benefit, having regard to the nature of the accommodation type and personal circumstances of the tenant group.

Over time the Enhanced Housing Benefit pot has grown. Initially, this was directly in response to the retrenchment of “Supporting People”. We advised providers (and not a few local authorities) on reallocating the eligible proportion of their Supporting People revenue loss into Enhanced Housing Benefit. Over time this has become a well-worn path, supported as it is by regulation and case law.

Commissioners/funders will routinely ask supported housing providers looking for funding “have you reallocated your eligible costs into Enhanced Housing Benefit?” because it makes absolutely no sense not to do so.

Providers might want to consider revising service delivery models if this adds value to the lives of people with additional needs. For example, we are often told “well we would provide more services because people need them, but we don’t have the funding”. One of the things we do is to review service models and staff job descriptions in order to introduce Housing Benefit-eligible services such as concierge, access control or night security, for example.

If you’re a qualifying supported or sheltered housing provider (i.e. most social/non-profit providers of supported housing) and you haven’t gone down this route, or you haven’t done so for a while, you really should think about it and get in touch.

Even with the introduction of Universal Credit Enhanced Housing Benefit remains payable in respect of supported housing tenants. This is despite the fact that Housing Benefit was one of the benefits absorbed by Universal Credit and would not otherwise exist. When someone claims Universal Credit, the online application asks the claimant whether they live in supported housing. If they answer “yes” to that question the housing component of their Universal Credit is administered by the LA on an uncapped basis under the Exempt Accommodation rules. This also gives supported housing residents protection from the Benefit Cap, and in some cases from the Spare Room Subsidy/Bedroom Tax.

The “but it has to end sometime” mantra is true of course; it’s just been overly pessimistic for years. It’s likely that the time for change will come when the UK Government finally decides on the funding model for supported housing (in England). Specifically, whether a  transitional arrangement of paying Enhanced Housing Benefit for supported housing via Universal Credit be formalised as a permanent arrangement (which is what we believe will happen). The UK Government did eventually commit to keeping the funding of supported housing within the welfare system after all.

Health and social care are devolved functions within the UK, and supported housing would be were it not for the fact that a proportion of its funding, in the form of (Enhanced) Housing Benefit, remains non-devolved. If the UK Government takes a sensible view of supported housing, and not just its funding, it’ll see it as an integrated part of the health and social care system in England going forward. At the point of change, whatever and whenever that is, it may be that Enhanced Housing Benefit will become a component of Universal Credit.

What happens in NI, Scotland and Wales depends on whether those nations have a fully devolved welfare system (easy to see in Scotland) and whether they choose to (part) fund supported housing from within it or choose to put the funding within health and social care commissioning structures.

Why You Should Think About It

Our message is that you should consider now whether you’re properly recovering the costs of providing the supported housing services that your residents need, or whether you should consider reviewing your service delivery model to enhance revenue recovery. Not just the costs of human (staff) services, but the additional costs you incur in maintaining and servicing your supported and sheltered housing.

Supported housing providers are rightly asked to demonstrate the value that they deliver. They should be equally concerned to identify the costs they incur in delivering that value.

The best way to do so is to ask us to audit what you do and to calculate what it that translates into as a full-cost recovery rent structure. If the amounts are more than you currently charge, then please let us negotiate with Housing Benefit colleagues on your behalf to redress the imbalance.

The good news is that it won’t cost you anything if we find that you can’t claim Enhanced Housing Benefit. If we find that you can, and we successfully negotiate an increase, then you pay a percentage of the increase we achieve for 1 year only. You only pay this percentage when you’re in receipt of the increased revenue and you can pay it over a 12-month period to aid cash flow. If we don’t get you an increase, you don’t pay us anything at all. Contact us.

There is an evident danger in not demonstrating your true costs, or revisiting your service delivery model, whether to appear “reasonable/competitive” to funders or for some other reason.

That danger may manifest itself if we have a funding system change at the point of which supported housing providers’ costs are frozen. If you haven’t optimised your rent and services charges income, the new system may assume you can make do with what you have.

Michael Patterson and Danny Key have worked together on Enhanced Housing Benefit, Intensive Housing Management and other things since 2005. Michael writes, publishes and speaks on supported housing and related matters and provides strategic advice a range of supported housing providers and revenue and capital funders.

Danny’s expertise lies in the technical side of Enhanced Housing Benefit and its relationship to capital. He is an expert on Housing Benefit regulations, the Exempt Accommodation rules and negotiation of claims.

If you’re interested in Enhanced Housing Benefit please get in touch. If Michael thinks your organisation properly qualifies for Enhanced Housing Benefit he’ll involve Danny and if you decide to ask us to help you claim it, you’ll also get half a day of Michael’s supported housing consultancy service (usually via Zoom) for no charge at all.

Categories
Policy

Exempt Accommodation, Specified Accommodation & Intensive Housing Management

Introduction

This was written in 2015 & remains relevant today.

The purpose of this Briefing is: 

  • To explain what Exempt and Specified Accommodation is and to make clear my view that most “Specified Accommodation” is actually “Exempt Accommodation”
  • To explain the Welfare Reform Act implications of Exempt and Specified Accommodation
  • To give comprehensive examples of Additional/Intensive Housing Management tasks and functions
  • To examine the future for Enhanced Housing Benefit and Additional/Intensive Housing Management

In recent months there has been much discussion about Exempt Accommodation and Specified Accommodation and a great deal of confusion about the difference between “Exempt” and “Specified” Accommodation.

The purpose of this briefing is to define what these definitions really mean and to make the very important point that most supported and sheltered housing, hostels and refuges currently being defined as “Specified Accommodation” but not “Exempt Accommodation” are actually Exempt Accommodation. This is very important for providers and local authorities from a financial point of view and to tenants/licensees from a Welfare Reform protection perspective.

As you may know the UK Government had said in 2012 that tenants in Exempt Accommodation would have the housing component of their Universal Credit administered outside of Universal Credit according to the Exempt Accommodation rules and would be protected from elements of the Welfare Reform Act (described below). Lord Freud, the UK Government Welfare Reform Minister, also subsequently said (September 2012) that there are some supported and sheltered housing services that “don’t meet the precise definition of Exempt Accommodation”. Such schemes, it is argued, might include agency-managed services and services providing “insufficient care, support and supervision”. We believe very strongly that, in the vast majority of cases, agency-managed schemes may well be Exempt Accommodation, and certainly can be established as Exempt Accommodation with some minor adjustments to the documentary arrangements in place.

The DWP then proceeded, in consultation with parts of the sector, to devise a widened definition that would capture both Exempt Accommodation and also those schemes that it claimed “don’t meet the precise definition of Exempt Accommodation”. This widened definition is known as “Specified Accommodation”.

So What Is Specified Accommodation?

There are 4 categories of “Specified Accommodation” as follows:

Category 1: Exempt Accommodation.

The term “Exempt Accommodation” came into being in 1995 as a means of identifying types of accommodation that were exempt from what was known at the time as “Local Reference Rents”, which capped the amounts of rent that private landlords could charge.

For an Exempt Accommodation scenario to exist ALL of the following 4 criteria must be fulfilled:

  • The landlord must be a non-metropolitan county council; voluntary organisation, charity or Registered Provider (housing association)
  • The landlord must have legal interest in the properties concerned (ownership or lease)
  • The tenants concerned must need “care, support & supervision” (in case law terms this means “more than normal property management functions)
  • The additional services to meet those needs (“Additional/Intensive Housing Management”) must be provided by the landlord or an agent on its behalf

Exempt Accommodation:

  • Entitles a social landlord to recover the costs of providing additional services to tenants/residents with additional needs via Housing Benefit.
  • Enables local authorities to fund enhanced levels of Housing Benefit, subject to a properly evidenced claim which shows that the money claimed equates to the cost of eligible additional services provided.
  • Enables local authorities to reclaim the money from the DWP via their Subsidy Claim. 100% where a Registered Provider (Housing Association) is involved but less where one is not.

Exempt Accommodation protects tenants from Welfare Reform Act provisions such as:

  • Spare Room Subsidy (“Bedroom Tax”)
  • Benefit Cap
  • Direct payment of rent

Exempt Accommodation applies, subject to the 4 qualifying criteria above, to:

  • Most supported Housing
  • Most sheltered Housing
  • General Needs Housing where the tenant has additional needs (Tenancy Sustainment)

Category 2: Supported housing where a third party (not the landlord) provides the “care, support & supervision”

Typically this would include agency-managed supported housing and schemes where tenants have personal budgets and purchase care packages from a third party provider.

As a consequence of this definition and some of the advice that has been provided within the sector, many providers have assumed that agency-managed schemes and accommodation within which tenants use personal budgets to buy care packages from third parties are not Exempt Accommodation. However, this assumption is very often incorrect.

We have to ask ourselves the question “what is care, support and supervision”? The case law definition (see Bristol City Council vs. AW [2009] and CSH/250/2104) is “more than normal property management functions”. So where a tenant has additional needs that require additional/intensive housing management and the landlord or an agent on its behalf provides the additional/intensive housing management, it is Exempt Accommodation, not Specified Accommodation category 2.

When we think about, it in most of the schemes wrongly classified as Specified Accommodation category 2, the landlord and/or the agent on its behalf provide Housing Benefit eligible additional/intensive housing management services in addition to and irrespective of any Housing Benefit ineligible care and support services that might also be provided. The fact that these additional/intensive housing management services are provided by the landlord or by an agent on the landlord’s behalf means that the scheme/service is Exempt Accommodation.

Such additional or intensive housing management services include, but are not limited to:

  • General needs housing management functions that are more intensively provided as a consequence of the additional needs of tenants
  • Additional or intensive housing management 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:
  • The provision of an alarm (even though alarms are not HB eligible) or the Housing Proactive system (which is HB eligible and is also entirely free to providers and tenants who are HB eligible)
  • Controlling access to the premises (concierge type services)
  • Ensuring rent is paid regularly and on time.
  • Explaining the occupancy agreement and assisting people to abide by it.
  • Organising inspections of property and arranging for any repairs or improvements to be carried out, including the replacement of furniture.
  • Ensuring that people are aware of their rights under their occupancy agreement.
  • Offering advice and guidance on keeping property to a reasonable standard of hygiene.
  • Assisting people to access other support providers as required.
  • Liaising with all relevant agencies, both statutory and voluntary, on the tenant’s behalf.
  • 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 Housing Benefit and other welfare benefits.
  • Helping to keep people safe by monitoring visitors, including contractors and professionals, and by carrying out health and safety and risk assessments of property.

Please see Appendix 1 for the technical definition of what constitutes an HB eligible service charge where people have additional needs. This is very useful where you are told “there’s no such thing as “Intensive Housing Management”, which of course misses the point by focusing on an informal phrase that describes services that people with additional needs might require in connection with the provision of adequate accommodation.

Category 3: refuge provision

Refuges for people subject to domestic violence and abuse are in an identical situation to Category 2 Specified Accommodation (above), which is that in the significant majority of cases they are Exempt Accommodation and not Specified Accommodation category 3.

The fact that people in refuge accommodation don’t also need to be in receipt of “care, support or supervision” by way of 3rd party funding is immaterial in this context as they will almost inevitably be in receipt of “more than normal housing management functions” anyway and therefore fulfill the case law definition of “care, support and supervision” for the purposes of Exempt Accommodation compliance.

Category 4: local authority hostels

Support Solutions UK has recently undertaken a lot of work with local authorities that have their own direct provision. Most local authorities are registered as registered social landlords with the appropriate regulatory bodies depending on which UK nation they are located in.

The fact of being a registered social landlord (and assuming compliance with the other 3 of the 4 Exempt Accommodation criteria, which is likely in the case of hostels and other accommodation for people with additional needs) means that local authority hostels are exempt Accommodation, not Category 4 Specified Accommodation.

Specified Accommodation categories 2, 3 and 4 means:

  • Protection from Benefit Cap & direct payment of rent but NOT Spare Room Subsidy (unlike Exempt Accommodation, which protects tenants/licensees from Spare Room Subsidy).
  • No guarantee of enhanced Housing Benefit if the rents are deemed “unreasonably high” as the local authority may refer the rent to the Rent Officer (unlike Exempt Accommodation, with which the local authority has to have regard for the costs of suitable accommodation elsewhere on a like for like basis if considering a restriction on rent or service charge)
  • Rent levels restricted to Local Housing Allowance where no Registered Provider is involved

If it is the case, as we strongly believe, that services that really are Exempt Accommodation (or “Specified Accommodation Category 1”) are being misdefined as Specified Accommodation Categories 2, 3 or 4 then we are guilty of failing to challenge an incorrect view of services that “don’t meet the precise definition of Exempt Accommodation” and consequently restricting Welfare Reform Act protection from tenants with additional needs and we are guilty of foregoing the opportunity to properly fund services for tenants with additional needs.

The Future for Enhanced Housing Benefit

I have worked since 2005 to assist organisations to allocate Additional/Intensive Housing Management costs into Housing Benefit where it is right and proper to do so. Most commonly this occurs where provider organisations have lost revenue from Supporting People but also where providers have not recovered their full eligible costs from Housing Benefit, irrespective of whether they receive Supporting People funding.

When I first introduced this idea with Support Solutions and reintroduced the concept of “Intensive Housing Management” it was treated by some with opposition and suspicion but has now become the default position for local authorities and providers, especially where Supporting People funding is being reduced or withdrawn. We were told that it wouldn’t survive the Welfare Reform Act but, on the contrary, Exempt Accommodation and Additional/Intensive Housing Management has become the gateway to proper levels of funding for services for people with additional needs and provides protection for such people from elements of the Welfare Reform Act such as:

  • Spare Room Subsidy (“Bedroom Tax”)
  • Benefit Cap
  • Direct payment of rent

Enhanced Housing Benefit applies to supported and sheltered housing and to general needs social accommodation where tenants have additional needs (Tenancy Sustainment services). But we have to ask the question, as many do, “how long will it last”?

When Lord Freud said in September 2012 that there are services that “don’t meet the precise definition of Exempt Accommodation” as a precursor to the introduction of Specified Accommodation, he also suggested that funding for Exempt Accommodation would be “localised” at some point in future.

We believe that this is likely to happen at some point in future so it is important for providers who are entitled to claim Enhanced Housing Benefit for Additional/Intensive Housing Management services to do so. It is also important for local authorities to agree well-founded and reasonable claims, as these are likely to contribute to local authority legacy funding going forward. To the extent that local authorities discourage such claims is the extent to which they may well limit the size of their own funding pot at the point at which the Exempt Accommodation budget is devolved. The UK Government might consider devolving Exempt Accommodation funding in the same way that it devolved Council Tax funding to local authorities (i.e. by taking the amount each local authority had claimed from the UK Government by way of Council Tax Benefit subsidy in the financial year 2012-13, deducting 10% and then devolving it to local authorities from April 2013).

There is a General Election looming of course, so things may change; however, our belief is that funding for Exempt Accommodation will be devolved to local authorities in England, which doesn’t have its own Government, and possibly to national Governments in Northern Ireland, Scotland and Wales.

We know that the DCLG & DWP have commissioned a review of the scale, shape and cost of the supported housing sector. We hope that it also considers its value! This review has yet to report and the forthcoming General Election will doubtless impact on the timing of its publication and possibly its outcomes. We will keep you posted as to developments when we are made aware of them.

Whatever the nature of any change please consider your organisation’s position, whether you’re a provider of services or a local authority Housing Benefit or commissioning colleague. Providers, both statutory and non-statutory, should ensure that they have reviewed their Housing Benefit revenue and their rent structures to ensure that their claims match the costs of the Additional/Intensive Housing Management services they provide to people with additional needs in supported, sheltered, hostel, refuge and general needs accommodation. I will help you do this and negotiate your claims for you on very, very favourable commercial terms as I always have (i.e. if we don’t successfully increase your housing revenue, you don’t pay us). Local authorities should also consider their strategic positions in relation to the payment of enhanced Housing Benefit for well-founded and reasonable claims and their ability to reclaim through subsidy what they pay by way of Enhanced Housing Benefit; again, I will be pleased to assist in this.

If and when funding for Exempt Accommodation is devolved it is likely to become a cash-limited pot, which may then be paid according to a limited set of eligible tasks. We believe that this is the wrong approach but inevitable whilst government at both central and local level prioritises cost over value and persists with separate funding pots for different types of additional needs (e.g. intensive housing management, support, social care, personal care etc.).

Appendix 1

“There is no exhaustive list of what can be defined as an eligible service charge. To be an eligible charge for HB purposes the charge must be connected with the provision of adequate accommodation having regard to the personal needs of that tenant group. Authority for this can be found in the DWP Adjudication Circular A22/2008, which was published in December 2008. Page 18 within Appendix A of that circular states that ‘The Commissioner’s decision in CIS 1460/1995 is authority for the proposition that the individual needs of the residents are relevant to the question of what is adequate accommodation. Arguably the special needs and problems of the residents of the home cannot be ignored in relation to paragraph 1(g)’ Paragraph 1(g) of Schedule 1 is of the Housing Benefit Regulations and relates to the service being connected to the provision of adequate accommodation. This is therefore suggesting that a service can be eligible having regard to a resident’s personal circumstances. The general population within supported housing are vulnerable people all in receipt of care and support and thus encompass a specific set of needs therefore the provision of an intensive housing management service is probably essential to the general tenant population of this specific type of accommodation.

Supported Housing is provided to primarily tenants who are disadvantaged with a wide range of complex and changing needs. There are a significant proportion of tenants whose high support needs, poor housing management awareness and lack of practical skills, mean that there is a requirement for a much more enhanced housing management provision to ensure that the tenants can sustain their tenancy whilst at the same time ensure that the landlord is providing reasonable and adequate accommodation for all tenants”

Please contact Michael Patterson if you’d like help with Exempt Accommodation, Specified Accommodation and enhanced Housing Benefit.

Please feel free to share this Briefing with whomsoever might find it interesting and please share it on social media.

© Please acknowledge the author as Michael Patterson when reproduced in whole or in part (Creative Commons licence applies).

Michael Patterson

March 2015

Categories
Finance & Funding

Funding Intensive Housing Management

Many of you will know what “Intensive Housing Management” is. It’s a term that the old Housing Corporation in England used to describe the additional housing management services that people in supported housing often need. Intensive Housing Management services were funded by the Housing Corporation through a revenue grant known (latterly) as SHMG (Supported Housing Management Grant) some of which was often paid on by RSLs to their specialist agency partners that typically manage the RSL’s supported housing.

The set of prescribed intensive housing management services was defined in hardcopy in the Housing Corporation’s “Guide to Supported Housing”, before the age of the Internet. There is a similar list you can gain access to online here: in Scottish statutory instruments 2002 number 444 with its list of “Prescribed Housing Support Services” in Regulation 3.

The revenue funding streams for intensive housing management were put into the Supporting People pot in 2003, to help fund what became known as “Housing Related Support”. And that, you might think, was the end of that.

Except that it wasn’t. Supporting People begin to retrench very quickly. In 2005 Michael Patterson and Danny Key teamed up to identify and promote a regulatory means of mitigating providers’ losses of Supporting People revenue, by claiming the cost of eligible Intensive Housing Management tasks from Housing Benefit. This involves the use of the Exempt Accommodation route to enhanced levels of Housing Benefit. 

Over time this led to a substantial number of eligible providers (housing associations and voluntary agencies namely) being able to claim enhanced levels of Housing Benefit for the costs of the eligible housing management tasks Supporting People no longer funded.

Michael Patterson renamed these eligible housing management tasks as “Intensive Housing Management”, a term which has returned to the language of supported housing, bringing with it a substantial pot of revenue known as enhanced Housing Benefit, which continues to exist to this day.

As someone with a values base I commend the “Exempt From Responsibility?” report written by Thea Raisbeck in November 2019 for Spring/Commonweal Housing, which identifies problems over the lack of regulation of supported housing, and the oversight of the system through which some landlords claimed enhanced Housing Benefit. To put it more bluntly: some unregulated supported housing providers are claiming Housing Benefit but apparently not providing adequate housing or intensive housing management services.

Not all supported housing providers are eligible for intensive housing management funding, but most social supported housing providers are. Rather than go through the criteria for Exempt Accommodation compliance here (but watch this space) just ask yourself these questions:

  • Are you a genuinely social organisation? (For the purposes of enhanced Housing Benefit this means nonprofit)
  • Do you generate value?
    • Outcomes for people
    • Cost-benefit
    • Wider social benefit (Community Sustainment)
  • Do you own or manage supported housing?.

If you can say yes to the above questions you’re likely to be eligible to claim Intensive Housing Management and Maintenance funding. It’s a complex process that requires you (or me on your behalf) to audit your supported housing and provide a properly optimised rent structure that you can use to support an enhanced Housing Benefit claim. I have a useful spreadsheet for your revised rent structure that you can continue to use into the future.

If, on the basis of my rent structure, you decide you want to claim Intensive Housing Management and Maintenance funding you can negotiate with the local authorities you work with, on your own. Or you can ask me to refer you to Support Solutions, the leading experts in enhanced Housing Benefit negotiation.

If you decide to work with Support Solutions you won’t have to pay my fee for devising the rent structure. Support Solutions will work for you on a “no increase, no fee” basis, taking only a percentage of the increase they achieve, for one year only.

It’s also important to consider the likely future funding of Intensive Housing Management and Maintenance, and supported housing in general for that matter. I’ll keep the wider context for a future blog post/briefing but what about the Intensive Housing Management components of supported housing revenue, currently paid as enhanced Housing Benefit?

We should bear in mind both the implementation of Universal Credit and the UK Government’s (stalled) “future funding of supported housing” policy agenda.

Universal Credit allows supported housing claimants to have the housing component of their Universal Credit paid by local Housing Benefit teams as enhanced Housing Benefit. The future funding of supported housing policy agenda originally intended to pass supported housing revenue, of which Intensive Housing Management funding is a substantial part, to local authorities but that idea was parked.

Nothing much has happened on the supported housing policy agenda due to the UK Government’s preoccupation with Brexit and the current Covid 19 pandemic. But the UK Government is working on a Social Care Bill, and they would be remiss to omit supported housing from it.

It seems opportune therefore to remind the UK Government and the wider sector that Intensive Housing Management funding needs to stay exactly where it is now – as a flexible component of Universal Credit.

Going back to the “Exempt From Responsibility?” report, and my own briefings for Support Solutions going back some years, it’s not just about the future funding of supported housing, important though that is. It’s also about supported housing regulation, it’s about how we define supported housing and it’s about what values base we apply to supported housing.

I’ll be publishing more blog posts and briefings in future you can see and follow my blog site (supportedhousing.blog) Please also follow me on Twitter at @MPattersonLtd

I’ll be following up this blog post with a briefing on Intensive Housing Management and Maintenance, co-authored with Danny Key of Support Solutions. Watch this space!