funding supported housing – The Supported Housing Blog

Context

This blog post is the third in the “What is Supported Housing?” Series. To summarise so far I have suggested that supported housing:

Be defined other than by timescale
Is where someone with an additional needs lives, for the duration of that need, irrespective of who the landlord is
Should be regulated and overseen (see my next blog post)
Should be commissioned, funded and “measured” according to Value Generation principles

The UK Government is working on draft social care legislation for England and devolved governments have yet to integrate supported housing into the health and social care mainstream. Supported housing, not least its funding, should be part of the health and social care mainstream.

Revenue

Supported housing revenue includes local authority and NHS administered funding for social and health care needs, and people’s own personal budgets.

Supporting People funding is now the exception not the rule. A significant amount of the value of the Supporting People budget (originally £1.8 billion) has been reallocated into (enhanced) Housing Benefit as Intensive Housing Management funding. It’s moved from the instability of local authority finances to the relative stability of the welfare benefits system.

The key question when it comes to recurring revenue for supported housing, however is “where will it sit in relation to the welfare benefits system?”. The UK Government gave a “Future of Supported Housing” policy commitment in 2018 to keep the funding of supported housing within the welfare system.

Lord Freud acknowledged in 2012 that people in exempt or specified accommodation would have the housing component of their Universal Credit administered by the local Housing Benefit team under the Exempt Accommodation rules. So effectively, enhanced Housing Benefit for Intensive Housing Management is paid as the housing component of Universal Credit on an uncapped basis.

I believe that this supported housing component of Universal Credit should be redesignated “Supported Housing Rent”, which should be payable to all supported housing providers regardless of legal identity, provided they are properly regulated/accredited and overseen (see my next blog post “The Regulation of Supported Housing”).

Whoever the landlord is, be it social, private, statutory, voluntary charitable; would it not be better for there to be a simple system whereby the costs of the building are met through a banded system to take account of different cost variables? In England these bandings would probably be regionally based. (See the “Lord Best letter” of 2017). The additional (non bricks and mortar) housing needs components can also be banded according to level of assessed need (low, medium or high).

This system has the advantages of reflecting variable levels of additional need and building/property costs whilst at the same time applying sufficient maxima to each band. It dispenses with the need for basing rent levels on wildly inconsistent Local Housing Allowance levels.

Within a Universal Credit claim Supported Housing Rent components would be therefore be awarded based on a banded regional basis to reflect the variable costs of the development and management of property in every and any given region of England, and whilst Universal Credit remains a non-devolved issue this model may also be of interest to NI, Scotland & Wales.

The housing based additional needs component of Supported Housing Rent could be paid at three levels: low medium and high. These are simple principles that allow for variable costs in both buildings and the needs of the people who live in them.

Recipients of Supported Housing Rent (landlords) will have to generate value:

outcomes for people
cost benefit to the public purse
wider community benefit.

They will have to comply with regulatory and oversight standards (see my next blog post). We really should dispense with the absurd and discriminatory notion that peoples’ entitlements to enhanced revenue (in this case Supported Housing Rent) as a consequence of their additional needs should be dependent on the legal identity of their landlord, which is the case now.

Capital

The capital funding of supported housing is a blog post in its own right. However, having given a view on supported housing revenue it seems sensible to make some summary comments on the capital position.

We are moving increasingly in the direction of private capital funded supported housing. This has been especially so in the case of Specialised Supported Housing (what I would refer to as “Intensive Supported Housing”).

There is a need to get the balance right between social motivation and profit. Put a different way, there is a need to be realistic about what percentage return on capital public revenue should be expected to return. Investors should generate value in what they do just as much as providers of supported housing are expected to do.

REITs (Real Estate Investment Trusts), which facilitate much of the investment in supported housing, need to evolve their structures in the light of the English social housing regulator’s judgements against some REIT-based housing associations and the associated trade press reporting.

Conversely, we should consider how well-placed social housing regulators across the UK are to oversee supported housing, a significant amount of which sits outside their sectors. I think there are strong arguments to make for the independent oversight of supported housing, arguments I shall attempt to make in my next blog.

Investment in supported housing is based on a viable revenue stream. This viable revenue stream, with its consequent impetus to investors, should be built into universal credit on a Supported Housing Rent basis.

The UK Government will also continue to deploy public capital (and revenue) in the form of targeted funding for specific outcomes. For example, it has recently announced that it is bringing forward £160m of its Rough Sleeping Services budget to provide 6000 homes with support for street homeless people in England. This is ambitious enough to be a game changer for street homelessness, provided the revenue for support is sufficient and stays in place.

Conclusion

We need to think about the funding of supported housing in the context of its outcomes (see my blog post on defining supported housing) and its regulation/oversight (watch this space!).

Supported housing needs revenue funding certainty for its day to day operation and in order to give investors confidence to invest and providers confidence to provide.

Supported Housing Rent builds revenue and confidence into the system and makes the relationship between needs and resources. It retains revenue for supported housing within the welfare benefits system.

Supported housing providers, “social” or not, should generate value and comply with regulatory/oversight frameworks in order to qualify for Supported Housing Rent.

In my 1st blog post of the “What is Supported Housing?” series I said that supported housing is a victim of its own limiting misdescriptions. I also argued that this isn’t helped by the definitions of supported housing in the UK Government’s (now stalled) “Funding Supported Housing” policy agenda of 2018, which I’ll look at below.

Here is an opportunity then, to offer some definitions for supported housing based on peoples’ needs. Definitions that will support the integration of supported housing into the social care mainstream.

This blog post may be of interest to UK-wide readers, despite the policy focus being on England. Social care is a devolved matter but supported housing still isn’t, to the extent that it’s funded through enhanced Housing Benefit/Universal Credit. In addition, the revised definitions of supported housing I propose have universal applicability.

Formal Definitions

The Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 give definitions of supported housing in its widest sense (for England) as follows:

“specialised supported housing” means supported housing—
(a) which is designed, structurally altered, refurbished or designated for occupation by, and made available to, residents who require specialised services or support in order to enable them to live, or to adjust to living, independently within the community,
(b) which offers a high level of support, which approximates to the services or support which would be provided in a care home, for residents for whom the only acceptable alternative would be a care home,
(c) which is provided by a private registered provider under an agreement or arrangement with—
(i) a local authority, or
(ii) the health service within the meaning of the National Health Service Act 2006(d),
(d) in respect of which the rent charged or to be charged complies with the agreement or arrangement mentioned in paragraph (c), and
(e) in respect of which either—
(i) there was no public assistance, or
(ii) if there was public assistance, it was by means of a loan secured by means of a charge or a mortgage against a property;

“supported housing” means low cost rental accommodation provided by a registered provider which—
(a) is made available only in conjunction with the supply of support,
(b) is made available exclusively to residents who have been identified as needing support, and
(c) falls into one or both of the following categories—
(i) accommodation that has been designed, structurally altered or refurbished in order to enable residents to live independently,
(ii) accommodation that has been designated as being available only to individuals within an identified group with specific support needs;
“support” includes—
(a) sheltered accommodation,
(b) extra care housing,
(c) domestic violence refuges,
(d) hostels for the homeless,
(e) support for people with drug or alcohol problems,
(f) support for people with mental health problems,
(g) support for people with learning disabilities,
(h) support for people with disabilities,
(i) support for offenders and people at risk of offending,
(j) support for young people leaving care,
(k) support for teenage parents
(l) support for refugees;

So Specialised Supported Housing is for people who might otherwise be in a registered care home and is funded through the use of private capital. It’s also exempt from the Rent Standard.

Other “Conventional” Supported Housing defined above is subject to the Rent Standard and reflects a “typical” definition of mainstream supported housing.

Both definitions in the Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 specify the landlord as a Registered Provider. However, there are many supported housing services run by nonprofit agencies that have no registered provider involvement, and still other supported housing services provided by the private sector. Are these not supported housing?

The legal identity of a tenant’s landlord does make a difference to that tenant’s entitlement to enhanced Housing Benefit where additional needs are an issue (only social/nonprofit housing tenants/licensees are eligible). This is perverse in circumstances where additional need isn’t restricted to social housing. The regulation of all supported housing is more important than the legal status of a supported housing landlord.

Definitions Proposed in “Funding Supported Housing”

In addition to these two broad definitions above, the UK Government’s “Funding Supported Housing” policy consultation originally had the following definitions of supported housing:

Short-term supported housing: The UK Government has defined “Short-Term Supported Housing” as being supported housing that is accessed by people in crisis and with a maximum duration of two years or until a transition to “long term stable accommodation” is possible, whichever occurs first.
Long-term supported housing: Long-Term Supported Housing includes people with learning disabilities mental health needs and other groups whose additional needs are permanent.
Sheltered & Extracare Housing: the UK Government hasn’t defined this type of supported housing in its “Future Funding” policy agenda, apart from identifying its existence. It did accept the need not to be too prescriptive in how sheltered and extracare are defined.

I don’t believe that timescale or client group should define Supported Housing; it should be defined by the nature of the needs it meets. As I mention in previous blog posts, definitions of supported housing based on a timeframe are about the restrictive management of a pot of public money, not about meeting peoples’ needs.

The proposed definitions of Short-Term, Long-Term and Sheltered & Extra Care Housing do not reflect the diversity of supported housing services. For example, where do Shared Lives/Adult Placements, Respite Care, Housing First and Intermediate Housing fit in? No consideration is given to the sometimes high degree of overlap between Sheltered & Extra Care, Long-Term Supported Housing and Specialised Supported Housing.

Proper consideration will be given to funding supported housing in my next blog post, but for the sake of clarity all forms of supported housing should be funded, in part at least, through the welfare system as the UK Government has accepted.

Revised Definitions

So-called “short-term supported housing” should be redesignated as “Immediate Access Accommodation“. Within that definition refuges and other forms of emergency accommodation for which Universal Credit is not immediately appropriate should be funded by a ringfenced local authority fund for up to 6 weeks, after which Universal Credit including an enhanced housing component should fund it.

“Intermediate Supported Housing“: which, by definition, applies to people who don’t need Immediate Access Accommodation, although they may have come from it, and don’t need Intensive Supported Housing, although they may have come from it. The duration of someone’s stay in Intermediate Supported Housing would depend on the duration and extent of their need within a system geared towards the maximisation of managed interdependence. If appropriate, Intermediate Supported Housing may be provided in the same building as Immediate Access Accommodation, for example a refuge. Funded through Universal Credit.

In the same way I challenged the appropriateness of the term “Short-Term Supported Housing” I believe the term “Long-Term Supported Housing” is inappropriate and should be replaced with the term “Intensive Supported Housing“. Within “Intensive Supported Housing” peoples’ needs can be of any duration but the point is that they’re intensive. This might be as a consequence of an addiction or as a consequence of a severe learning disability to give just two very different examples of many.

Specialised Supported Housing and Intensive Supported Housing are not dissimilar. If the requirement for Specialised Supported Housing to be privately funded by definition were removed, they would be practically identical.

Sheltered and Extra Care Housing is defined by the UK Government’s 2^nd set of “Funding Supported Housing” consultation proposals. I agree that definitions of the people who live in sheltered/extracare shouldn’t be too prescriptive.

Wherever we are in the UK it is important that supported housing is an integrated part of the network of social and healthcare services that people need. Social care reform is on the agenda universally and it’s important that we inform the nature of change by putting supported housing front and centre.

Providing revised definitions of supported housing that focus on peoples’ needs is important in a context where such definitions are habitually geared to the management of a budget (“long-term”, “short-term” etc). I understand that money is important but it’s much better looked at as part of a Value Generation approach:

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

Cost alone is a very crude measure of the value that supported housing generates. Value Generation contextualises it better within a wider framework of measurement.

My next blog post in this “What is Supported Housing?” series will focus on funding supported housing.

Michael Patterson 18th May 2020