Simon,
I agree with your concern regarding the result of CH/0423/2006, I think HB officers will be obliged to incorporate the findings of this decision within their decision making procedures, which will have huge implications on supported accommodation providers and therefore the vulnerable people with disabilities. I am sure everyone will agree that what we dont want to witness is a large number of vulnerable people being made homeless or forced into residential or hospital care.
Below is a summary of the background regarding the development of supported accommodation and the implications of this decision:
Supported Living arrangements have become increasingly popular over the last 10-12 years. Such arrangements are exemplified by :
-Secure tenure through an assured tenancy -Separation between the provider of housing, and the provider of support -Access to the full range of benefits, including housing benefit to cover all housing-related costs -Greater levels of choice in housing type and location, often with access to the open housing market -Some improvement in choice about who you live with ( if anyone) These same characteristics are also found where people are shared owners of their homes. Typically they will have a mortgage for 50% of the property where the other half of the property is owned by a housing provider and rented to them with housing benefit being claimed.
Whilst supported living is not necessarily suitable for everyone it has increasingly become a mainstream choice for people, and is supported as a superior alternative to residential care and hospital care by government, through the Valuing People White Paper and most subsequent guidance.
Because vulnerable people tend to have low incomes, generally derived from state benefits, it has been necessary for housing providers wanting to offer tenancies to vulnerable people, to seek subsidy. Subsidised housing comes in many forms, however the ultimate source of all finance for ‘social’ housing is the state. For some people good quality council housing has provided suitable accommodation where the subsidy comes from a mix of central government and local government funds. Housing Association lettings are usually funded through grants from the Housing Corporation, another ‘arm’ of government. Accommodation costs for people living in residential care have always been funded by Social Services, or a mixture of Social Services and Health. Again the major part of this funding ultimately comes from central government, although there has always been an element of additional subsidy from Council coffers.
It became increasingly evident towards the middle of the 1990s that these forms of subsidy were simply not enough to meet the burgeoning demand for more supported living tenancies. Unfortunately the allocations of funding from the Housing Corporation not kept pace with demand, and, in addition, restraints were starting to be applied to rent levels which made it increasingly difficult for Registered Social Landlords ( Housing Associations registered with the Housing Corporation) to make ends meet when providing accommodation for people wanting to access supported living. Many local authority housing departments had lost their ability to meet specific needs for accommodation, having sold off their houses to Housing Associations. Whilst it could be argued that this might be a better way of managing housing, a link started to be eroded between the responsibility of the council to provide housing and support for its citizens, and their ability to deliver this. This deep-seated local ‘welfare’ principle is not necessarily a part of the formal responsibilities of Registered Social Landlords. Social Services and Health found that their budgets were under pressure because of the loss of economies of scale following the closing of the hospitals and the accelerating reduction in large, congregated residential care options.
Despite research findings which showed that supported accommodation costs for vulnerable and disabled people were significantly higher than for non-disabled people there has never been any recognition that supported housing should be treated differently in relation to rent restriction criteria applied by the Housing Corporation.
As demand increased and supply faltered another subsidy route started to become increasingly attractive – Housing Benefit. The housing benefit regulations allow for there to be a significant degree of rent control through the determination of the rent officer. Each area has it’s own ‘reference’ rent figure for different types of housing and location. In CH/0423/2006 the local reference rent was £45 per tenant per week. People who meet the criteria for being vulnerable, however, can avoid the determination of the rent officer if they live in ‘exempt’ housing. Regulation 10(6) of the 1995 regulations tells us that exempt accommodation is accommodation which is
“ provided by a non-metropolitan county council ……… a housing association, a registered charity or voluntary organization where that body or a person acting on it’s behalf also provides the claimant with care, support or supervision “
Housing providers working closely with Social Services and prospective tenants have been able to provide accommodation by using private finance to acquire properties where there was no existing subsidy available. Because the tenants were classed as vulnerable, and because the housing was exempt, the higher levels of rent, caused by the necessity to meet the cost of borrowing the money to buy the property, have been met. Effectively a very large percentage of vulnerable people living in supported accommodation have been able to access better housing sourced from the open market, and funded through housing benefit. In this context housing benefit has been seen as just another state subsidy to be used when other subsidies have not been available.
Regulation 10(6), up until quite recently, had always been generally interpreted widely. This is to say that no scheme would exist without the Housing Provider, the Provider of the Care/Support Service and Social Services/Health working in partnership,and therefore it was of limited interest which organization provided which bit of the service. In reality, however, supported living arrangements have always followed the practice of separating the care/support elements from the housing/housing management elements. The reason for this is to make sure that if any tenant wanted to change the organization providing their care/support they could do so without having to change their accommodation. Similarly if they wanted to move they would be able to take their care/support provider with them to their new home as support staff were no longer connected to the properties, being domiciliary in nature. Separating support from housing also helps to strengthen the argument that supported living arrangements are not registrable as residential care homes under the Care Standards Act.
The Commissioners decision in June has comprehensively changed the position. The decision treats regulation 10(6) very narrowly and literally. Any scheme where the landlord does not also provide all of the care, supervision and support will no longer be exempt. This means that the rent level will revert to the local reference rent figure. In turn this will mean that the majority of the real housing costs, including paying back mortgages, will not be met. This could mean that housing providers will have to dispose of these properties leaving a very significant number of people, including very severely and profoundly disabled people, without accommodation.
Some legal advice has been offered and it has been suggested that local authorities might decide they can subcontract the purchase of the care and support services to the landlord. Alternatively the landlord could lease the property to the care/support provider, or, indeed, the local authority. All of these options would appear to meet the new regulatory interpretation. There may, of course, be a number of other ways this might be addressed. It is worthwhile noting, however, that if the local authority or the support provider do end up as being responsible for both housing and support, this might create difficulties in relation to registration. It has therefore been suggested that, where this situation exists there could be a further subcontract, let to a housing provider, to provide all of the housing support and management.
This may be an extremely short term reaction to events however there is strong evidence to suggest that the Commissioners decision has been circulated to all housing benefit offices and that they are actively looking to revert rents to reference levels now. In a quick call to one national housing provider it was revealed that no less than four housing benefit offices had been in touch within the last few days seeking to find out whether reg 10(6) was being mis-applied, on the basis of Commissioner Turnbull's decision.
It is probably right to suggest that, if the following circumstances apply, the situation is critical and action needs to be taken immediately.
-Housing Benefit is being claimed and the rent being charged is higher than the local reference rent for the area. -There is a separation between the housing provider and the care/support provider.
In the medium to long-term there should be some re-examination of the regulations in relation to housing costs for vulnerable people and there should also be a strategic discussion within each local authority to determine how the higher costs of supported accommodation can be met. In the very short term there is the potential for there to be a crisis involving housing tenure for very large numbers of vulnerable people as housing benefit officers start to cut rents.
Regards
Dan
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