Tag: value generation

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
Policy

The Problems with Exempt Accommodation

problems with exempt accommodation
problems with exempt accommodation

Background

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

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

Problems?

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

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

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

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

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

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

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

Private Capital

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Exempt Accommodation Project.

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

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

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

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

Talk To Us

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

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

Categories
Training Events

Intensive Housing Management, the National Statement of Expectations & the Supported Housing (Regulation) Bill

Supported Housing under a Magnifying Glass

A free Zoom event scheduled for 22nd April 2021 at 10am presented by Michael Patterson and Danny Key, two of the UK’s foremost experts in supported housing policy and finance.

This event will be for a duration of 90 minutes – 2 hours depending on the volume of questions from attendees, who will be provided with the presentation including links to relevant resources.

Context

Back in 2005 the Supporting People initiative was retrenching and supported housing providers needed a way to offset some of the consequent loss of funding. Danny Key had identified a refunding model based on the Exempt Accommodation rules and Housing Benefit regulations (enhanced Housing Benefit). Michael Patterson reintroduced the term ‘Intensive Housing Management’ to describe what it funded and set about promoting it to supported housing providers. The rest is history.

Enhanced Housing Benefit for Intensive Housing Management is now a revenue stream upon which the supported housing sector depends. It has survived the introduction of Universal Credit & UK Government policy changes. However, poor regulation and a lack of oversight of supported housing has led to some individuals and providers seriously abusing the system to the detriment of everyone except themselves. This has infomed the development of the National Statement of Expectations for Supported Housing and led directly to the Supported Housing (Regulation) Bill.

This event looks at:

  1. Enhanced Housing Benefit for Intensive Housing Management & Maintenance funding: what is it, who can claim it and how?
  2. What impact does the National Statement of Expectations for Supported Housing have on Enhanced Housing Benefit and supported housing in a wider context?
  3. What does the Supported Housing (Regulation) Bill mean for supported housing in general and for Enhanced Housing Benefit?

If you would like to participate in this event please email us with the words “event booking” in the subject line. We will confirm your participation by replying with a link to the Zoom event and a passcode.

If you would like advice on Enhanced Housing Benefit/Intensive Housing Management or any other aspect of supported housing please email us with the words “consultancy inquiry” in the subject line.

Michael Patterson is the author of the Supported Housing Blog and was responsible for reintroducing the terms “Intensive Housing Management” and “Tenancy Sustainment” to the supported housing sector and is currently promoting Value Generation as a means of measuring the quality of supported housing. Michael is available for consultancy assignments on any aspect of supported housing and specialises in revenue and capital finance and supported housing policy. Michael works with Danny Key on Enhanced Housing Benefit projects.

You can subscribe to the Supported Housing Blog by clicking this link.

You can contact Michael by emailing him on michael@michaelpatterson.co.uk or calling 0800 002 9467.

Please share this blog post with anyone you know who has an interest in supported housing, health & social care.

Supported Housing under a Magnifying Glass

Categories
Policy

The Supported Housing (Regulation) Bill

Supported Housing Regulation

As those of you familiar with my briefings and blog posts will know, I have for some time been advocating the need for supported housing to be regulated. In devising a system of regulation and oversight, we have the opportunity to either create a system that enables supported housing to generate value in a big way or one that is an albatross that starves supported housing of revenue and serves only to support the discredited system of public sector cost control within which the balance between cost and quality has become compromised. The latter is inimical to Value Generation, which should underpin public sector commissioning (and much else besides). It has 3 components:

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

Allow me first to make the distinction between regulation and oversight in supported housing, as I have done previously. 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.

Having made that distinction, it should be noted that the supported housing sector has a multiplicity of regulators (the Charity Commission, the various social housing regulators across the UK and even the FCA for some voluntary organisations). The only thing they have in common is difference unfortunately, and none of them are in any way expert in supported housing. There is a large and growing number of entirely unregulated supported housing providers as well.

Recent events, including the massive growth of Exempt Supported Housing providers both nationally, but especially in Birmingham and regulatory judgements by the English Regulator of Social Housing have brought this lack of regulation to the fore, resulting in the publication of the Supported Housing (Regulation) Bill, which received its first reading in the House of Commons in November 2020.

What is immediately noticeable about the commentary on this as yet unpublished bill are two things:

  1. A lack of distinction between regulation on the one hand and oversight on the other (but it’s early days).
  2. The intention to locate responsibility for what the title of the bill calls “regulation” (although I think it means oversight) in the hands of local authorities.

I’ve covered the distinction between regulation and oversight above and the bill needs to deal with this distinction in its wording for its scheduled second reading in the House of Commons.

The current systems of (organisational) regulation are wildly inconsistent both in their scope and application.

So does the bill intend to place regulation or oversight in the hands of local authorities?

My view is that it would be appropriate for local authorities to be able to regulate and accredit supported housing providers much as they did under the Supporting People initiative. At that time providers had to demonstrate to local authorities that they met certain standards in governance, financial management and stability, operational competence and diversity and inclusion. Why not update and improve the old Supporting People accreditation process rather than reinvent the wheel?

Oversight, however, is a different matter. I have long been of the view that the oversight of supported housing, i.e. the measurement of the quality of what supported housing does, should be separated from those who commission and/or fund supported housing. Local authorities are motivated by cost control, which is inimical to Value Generation, and they’re not appropriately resourced or structured to oversee the operation of supported housing.

The National Statement of Expectations for Supported Housing gives English local authorities a great deal of responsibility for the strategic commissioning and “market management” of supported housing. We are already seeing some local authorities in England setting up new commissioning infrastructure, including Revenues and Benefits colleagues (who administer enhanced Housing Benefit), to fulfil these National Statement of Expectation responsibilities.

Supported housing needs to have objective measures of quality, based on Value Generation principles, that are clearly separate from the National Statement of Expectation-based regulatory responsibilities of local authorities and their strategic partners.

As per my previous briefings and blog posts on the regulation and oversight of supported housing, I believe that oversight (as distinct from regulation) systems should be  independently developed on the basis of Value Generation principles by third parties such as universities, albeit in consultation with local authorities and supported housing providers, but implemented independently. Local authorities and their strategic partners can then use the independently collected oversight/operational quality data on supported housing providers to inform commissioning and/or funding decisions required of them by the National Statement of Expectation for Supported Housing. At the same time a clear separation is maintained between oversight on the one hand, and commissioning/funding on the other. This way there is less risk of a conflict of interest between the measurement of quality and cost control. If cost control was ditched in favour of Value Generation, then it would be a different matter.

I would urge all legitimate supported housing providers of all types to engage with the Members of Parliament who are sponsoring this much-needed Supported Housing (Regulation) Bill in order to inform its content and direction. Specifically, the need to make a well calibrated distinction between regulation on the one hand and oversight on the other, and also to make the case for the oversight system to be developed and implemented on Value Generation principles separately from local authorities and their strategic partners.

We can then have the assurance that the measurement of supported housing services’ quality will not be compromised by the dead hand of cost control.

The email addresses of the MPs in question are below. Please contact them and put “supported housing (regulation) Bill” in the subject line. You can refer them to this briefing if you wish by including this link https://supportedhousing.blog/2021/02/19/the-supported-housing-regulation-bill in the body of your email and telling them that it’s less than a 5 minute read.

Kerry McCarthy: kerry.mccarthy.mp@parliament.uk  

Mr Clive Betts: officeofclivebettsmp@parliament.uk

Shabana Mahmood: shabana.mahmood.mp@parliament.uk  

Steve McCabe: stephen.mccabe.mp@parliament.uk

Bob Blackman: bob.blackman.mp@parliament.uk

Helen Hayes: helen.hayes.mp@parliament.uk

Fleur Anderson: fleur.anderson.mp@parliament.uk

Tim Loughton: loughtont@parliament.uk

Andrew Selous: andrew.selous.mp@parliament.uk 

Mohammad Yasin: office@mohammadyasin.org  

Munira Wilson: munira.wilson.mp@parliament.uk

Andrew Gwynne: GwynneA@parliament.uk 

Categories
Policy

The National Statement of Expectations for Supported Housing

Supported Housing Header
The oversight of 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

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
Policy

The Oversight of Supported Housing

Colourful model houses on a pink background

Context

The purpose of this blog post is to identify the high-level principles for the regulation of supported housing and for the assessment of the value generated by supported housing. Collectively we might call this “oversight”. The details of both systems are content for a future, longer published briefing (watch this space).

Supported housing accommodates between 600-700,000 people in the UK, some of whom have high levels of additional need. Supported housing providers receive over £4 billion annually in Housing Benefit/Universal Credit revenue together with contributions from the people they accommodate and, in some cases, statutory sector top-up funding as well.

Oversight

No one is responsible for the oversight of supported housing. Some might argue that there are plenty of regulators in the supported housing sector: the various national social housing regulators, the Charity Commission in England and Wales, the OSCR in Scotland. To a greater or lesser extent these agencies might regulate supported housing providers, but they don’t oversee supported housing or what it does, and they probably shouldn’t try.

Supported housing accommodates a wide range of additional need and there is a need for oversight. I’ve made reference a number of times recently to Thea Raisbeck’s “Exempt From Responsibility?” Paper, part of which looks with concern the unregulated Exempt Accommodation sector.

There is a distinction between regulation on the one hand and the measurement of quality/assessment of value on the other, although there is a relationship between them as “oversight” functions.

Regulation & the Assessment of Value

Regulation might include the ongoing assessment of:

  • Governance/organisational competence
  • Financial security and stability (calibrated to accommodate a diversity of specialist supported housing providers)
  • Service delivery competence
  • Values

Any system for “measuring” (assessing) the value of what supported housing does, separately from regulating the organisations that provide it, should be based on Value Generation principles:

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

We have the opportunity here to put something in place that works. Whilst the UK has increasingly divergent health and social care systems, the regulatory and value assessment approaches I’m setting out have potential applicability across the 4 nations.

Some of you may recall the QAF (Quality Assessment Framework), compliance with which was required for Supporting People funding, although not all supported housing providers had Supporting People funding. In addition to QAF compliance, supported housing providers had to submit performance returns (SPPIs). Over time, these returns became increasingly compromised by the “cost control” bias applied to them by local authorities seeking cost savings. This in turn encouraged some providers to describe the service delivery outcomes in unjustifiably positive terms in order to maintain their less than adequate funding.

Consider this example, which is true. Someone with a high level of additional need who lives in supported housing runs up high arrears, threatens other people and causes significant property damage. That person is then moved by the (regulated) supported housing provider into private sector accommodation without recourse to eviction (this was pre-Covid 19), and this is described as “planned move on”. The planned move on enables the supported housing provider to tick the “successful outcome” box in contractual compliance terms when what they actually did was to pass unresolved need to another part of the system.

Neither the system for assessing value (Value Generation) or the regulatory framework it sits next to should be operationally onerous for providers of supported housing. The oversight tail shouldn’t wag the operational dog on a day-to-day basis.

Smaller and specialist providers often struggle to comply with finance and governance regulation requirements. Regulation systems should adjust themselves to the safe operating parameters of all supported housing providers, not vice versa.

Systems for regulating supported housing providers and for assessing the value they generate should be developed independently by universities or other social policy research bodies as national frameworks (by which I mean separate frameworks to suit the particular characteristics of the health and social care system in each nation).

It would be appropriate for the body that develops the regulatory and value assessment frameworks to then operate them independently from but in conjunction with the agencies that commission and fund the supported housing. This would break the link between funding and the assessment of value, which needs to happen lest we focus on the cost of everything and the value of nothing.

Summary

Supported housing oversight is essential. It accommodates high levels of additional need and receives significant public and other revenue.

An oversight system comprised of regulatory and value assessment components should be independently developed and then implemented/managed by a university or social policy agency.

Regulation should accommodate diversity and specialism: it should not discriminate in favour of scale.

Oversight as a whole should maximise security and quality of outcome for people without impinging on supported housing providers’ service delivery resources.

There is change to the social and healthcare landscapes throughout the UK. The evolution of health and social care should include seeing supported housing as an integrated part of the different systems within the 4 nations. For this to occur it is important for supported housing to have the type of oversight I have described.

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.

Categories
Policy

What is “Supported Housing”? (Part 1)

Supported Housing under a Magnifying Glass

Supported Housing: A Victim of its Own Misdescription

As an advocate for supported housing I think it is important to think about what we actually mean when we think of “supported housing”.

In my experience it is certainly the case that supported housing has been and remains a victim of its own misdescription. We have allowed people and institutions, some of whom see themselves as advocates for supported housing, to impose their own limiting beliefs and definitions. We have allowed our vision of supported housing (and other preventative, enabling services) to be blurred by other agendas such as “cost control” in the commissioning of supported housing and the administration of public money. The preoccupation with the cost of everything and the value of nothing has led us to limit our own beliefs about what’s possible with supported housing and has helped to restrict its significance as an essential part of our social response to additional need.

Supported Housing, Health & Social Care

Supported housing is routinely seen as a disconnected, less important component of the social network of services people need. It’s not seen as an integral part of the wider social care agenda, which is its rightful place. Social care services throughout the UK are under immense pressure; there is both an opportunity and a necessity to talk about supported housing in a way that gives it the status it deserves but seldom gets as part of the solution to the UK-wide crisis in social care. 

The Scottish Government has taken steps to integrate health and social care in both structural and funding terms, but supported housing seems to be a separate matter. The Welsh Government is also focusing on health and social care integration and makes the link with housing and education without being very specific. Northern Ireland has integrated Health & Social Care Trusts, which cover residential care but not supported housing. The UK Government, on behalf of the otherwise ungoverned English, has said it wants to solve the social care crisis, but we have yet to hear any specific proposals. In all 4 constituent nations of the UK it is important to identify supported housing as fundamental to any vision of the structure of health and social care.

The next few posts to the Supported Housing Blog will focus on how we should define, fund, review, “measure” and regulate supported housing. The intention is to offer a view of the nature, scope and purpose of supported housing and its place within the wider agenda of social care.

What is Supported Housing?

The most obvious, and least helpful, way to see supported housing is as buildings in multiple occupation, owned or managed by a social organisation that were designed and developed to temporarily accommodate people with additional housing and other needs. It’s certainly true that such supported housing does exist, and so it should, but not at the price of limiting our thinking and peoples’ choices.

I’ve always considered that it is less about the building and the landlord and more about the people and their needs. For me supported housing is somewhere that someone with an additional need lives. It is supported housing for the duration of that additional need (and the length of time that someone is supporting the person to live there). Sometimes it’s permanent supported housing, sometimes it’s temporary supported housing: it all depends on what its occupants’ needs are

It shouldn’t matter whether it’s “social” housing, rented, owned, multiply occupied or solely occupied; whether it was developed and built as “supported housing” or just an ordinary house or flat

Furthermore, we shouldn’t make the damaging mistake of limiting how people see the scope of supported housing through careless definitions of its purpose and of the people who live in it, for example, as describing it as for “…people who need a bit of support”. Supported housing is for such people, but it’s also for people who would otherwise be in hospital, registered residential care or prison.

Neither should we allow the tail to wag the dog by giving different “types” of supported housing definitions based on timescales (“long-term”, “short-term”). Such definitions are based on a discredited “cost control” approach to managing the administration of the funding upon which supported housing depends. When looking to commission or fund supported housing “lowest unit cost” should not be a reason to fund it, it should be a reason to scrutinise more closely its outcomes in the context of Value Generation, which is defined as follows:

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

Then we can have a much more nuanced idea of whether it should be funded. A crude dependency on cost control and the preference for lowest unit cost over all else prioritises the management of a budget over the needs of people. And it’s an expensive way of doing things too: when we fail to invest in preventative services such as supported housing, we pay a much higher financial price to fund otherwise avoidable healthcare, criminal justice, homelessness and other interventions as a consequence. And that doesn’t include the calamitous human cost of a failure to invest in prevention.

The funding bias in favour of “social” providers is a reflection of the lack of any proper regulatory framework for supported housing. The lack of dedicated regulation forces us to take false comfort from the fact that “social” organisations are often regulated by some agency or other (although not as supported housing providers per se). To assume that supported housing run by a social landlord will necessarily be cheaper or better than any other form of supported housing is an assumption borne of a failure to imagine how supported housing regulation and funding should work.

To Summarise

So, the story so far is that we are having to work and live with a system the fundamentals of which are in error.

We haven’t thought deeply enough about supported housing to conceptualise what it is in order to describe it properly. In order to describe supported housing properly I’m going to devote my next few blog posts on how we should 

  • define it
  • fund it
  • regulate it 
  • measure the quality of what it does.

It is important to take the opportunity to think in depth beyond the restraints of the system that currently defines and funds supported housing from a cost control perspective, which fails to regulate and measure quality in any meaningful sense.

Watch this space for weekly Supported Housing Blog posts that develop a definition of supported housing as part of the wider health and social care agenda. Please do comment on this blog post and share it widely.

Michael Patterson

May 2020