Future of supported housing in ‘suspended animation’, with potential shortfalls of over £4m a year

SFHA chief executive Mary Taylor - Image credit: Holyrood

The long-term future of supported accommodation has been left in “suspended animation” by uncertainty over housing benefits caps, according to the head of a housing body.

Scottish Federation of Housing Associations (SFHA) chief executive Mary Taylor said the UK Government’s announcement this week that it is to delay implementation of a cap on housing benefit for people living in supported accommodation until 2019 “merits a cautious welcome”.

However, she pointed out that building houses is a long-term process that “cannot simply be frozen and unfrozen at will”.

The shortfall in funding for people in supported accommodation would be between £4.3m and £5.6m a year were housing benefit to be capped for those living in supported housing, according to estimates in a new report by the SFHA published this week.

For tenants aged under 35 living in non-supported social housing, where the change already applies to all new tenancies from April 2016, with the cap on payments to begin in April 2018, the SFHA calculates the total shortfall to be between £800,000 and £1.3m per year.

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Following the introduction of the cap for supported housing in 2019, new ring-fenced top-up funding for supported accommodation will be introduced to compensate for the cap, which the Scottish Government will be responsible for administering.

The Department of Work and Pensions has not said how much the top-up funding will be, simply that it “will be set on the basis of current projections of future need”.

Responding to the UK Government announcement, Taylor said: “The DWP announcement merits a cautious welcome as it gives us all more time to work out exactly how we are going to prevent costs of between £4.3 million and £5.6 million a year hitting vulnerable supported accommodation tenants in Scotland – and by default their social landlords.

“Unfortunately, it does not address our concerns about how single people under 35 who are not in supported accommodation but who are still ‘at-risk’ will cope with imminent reductions in their social security payments.

“The DWP’s intention to hand over supported accommodation funds to Holyrood means it is more important than ever that the Scottish Government sets out its initial position in relation to this critical issue especially given the its ambitious target to build 50,000 more affordable homes, some of which will have to be for supported accommodation.

“If housing associations don’t know whether the social security system in Scotland will protect vulnerable people properly – that is, by paying their rent – and won’t really know one way or the other for another three years, they are unlikely to take on the significant financial risks of building and developing more supported accommodation.

“Delaying the introduction of the policy until 2019 does not address this issue. Building houses is quite obviously a long term process with extensive lead in times that cannot simply be frozen and unfrozen at will.

“Until there is complete clarity on these points from both the UK and Scottish Governments the long term future of supported accommodation in Scotland will remain in suspended animation.”

Supported accommodation houses some of the most vulnerable people in the country, including the elderly, people with disabilities, the homeless and women feeling domestic violence.

Rents are usually more expensive than in standard housing because of the support element in addition to normal housing costs.

However, the SFHA points out that they are a significant saving on the alternatives, such as increased hospital stays, homelessness, institutional care or prison.