Tag: supported housing rent

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 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 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
Finance & Funding

Funding Supported Housing

Funding Supported Housing

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.