The government has sought to reassure developers in the supported housing sector that it will find a funding solution that will provide the certainty they need.
Ministers discussed the future of supported housing at a meeting of the Communities and Local Government Committee and Work and Pensions Committee last night (28 March), where concerns were raised about the impact that funding uncertainty is having on developers.
At present, tenants in the sector are still able to claim housing benefit to help with supported housing costs, but with this set to be abolished, a new system is required.
Under the new benefit regime, universal credit will cover core rent and service charges, with funding devolved to local authorities to provide a ‘top up’ reflecting the typically higher costs of offering supported housing.
But last night concerns were raised that a system of top-ups based on the local housing allowance rate would open up large regional disparities in funding.
Minister for local government Marcus Jones said: “We are seeking to address these concerns in the green paper and provide a solution that rates based on local housing allowance rate and top-up provided.”
Caroline Nokes MP, parliamentary under-secretary of state for welfare delivery, said the rate would be a building block, adding “the government had to start somewhere”.
“We are conscious we need to find a model that works for a very diverse sector across the country,” she commented.
But Ms Nokes appeared to rule out using a banding system for supported housing on the grounds that it could distort incentives.
“We need a system of flexibility,” she said. “A system of bands could lead to under supply in the most expensive areas and oversupply in the least expensive, and there would be an incentive to find the most cost-effective.
“But I want to cater for all of the needs – not just the 71 per cent of the elderly, but also some of the high-needs groups and some that are not particularly attractive to local authorities to house in their area.”
Ministers also pledged to provide more detail on the proposed ring-fenced grant that local authorities will receive, which will be calculated using current funding levels and projections of future need.
Mr Jones added: “We are mindful of the need for more certainty. From the responses to the consultation we will be setting out in more detail about the ring fence and how it will work, and we are trying to get the balance right.”
The government is set to publish a green paper on supported housing at the end of the spring, although no specific date was given.
simon.allin@ft.com
