The first and critical point is that this is not a consultation. Under the title ‘Purpose of this consultation’ on page 6 it says: -
“The Government proposes to change Housing Benefit for those who live in supported housing within the social and voluntary sector. The consultation document seeks your views to inform the detailed policy design”
The responses sought are on the design of the new policy but NOT on the decision to change the policy. As such the decision to change the policy has been made and it is just the design of the replacement that is sought from : -
“This consultation is primarily aimed at people who live in supported housing and those who represent their views, as well as those involved in the commissioning, funding and providing of supported housing with an interest in how Housing Benefit assists their tenants to pay their rent.”
This is also on page 6 under ‘Who this consultation is aimed at’
So we see a change is to be made and the government is seeking the views of tenants and residents in all forms of exempt and supported accommodation (ESA), ESA providers, and commissioners. Yet to ask anyone for a replacement it is necessary to first understand (a) what is being given up and (b) to give enough information on its replacement, and neither of these are evident in the paper.
(a) What is being given up?
Existing rents are incredibly transparent between the provider setting them and the experienced decision maker – the HB department – who only agree to pay the rent level if all items of provider expenditure can be proved to be ‘reasonable, realistic and justifiable.’
(b) What is the replacement?
A hodgepodge of vague and indeterminate funding streams based on Local Housing Allowance (LHA) the private sector funding variant of Housing Benefit currently paid to private tenants. Three variants are seemingly proposed each of which is not costed and so ESA tenants and ESA providers and ESA commissioners can’t know what they will get in replacement funding terms!
Of course this means that all those whose views are sought in this purported ‘consultation’ cant give any semblance of the design of this new replacement system. This creates a huge amount of unnecessary instability in the entire ESA sector, vulnerable resident, provider and commissioner.
(c) How did we get here?
A research report was commissioned and published by DWP in 2010 called “‘Exempt’ and supported accommodation” (
) and this 100+ page report is referenced many times in the paper.
The research ‘found’ that (i) there are 170,000 people in ESA; and, (ii) it cost between £70m and £130m more than general needs housing. “…although there is considerable uncertainty associated with this estimate” on page 80.
This is after stating on page 79 that “Software systems do not allow local authorities to report the number of claimants in ‘exempt accommodation’ reliably…..It has proven even more difficult to estimate the numbers of claimants living in other types of supported accommodation.”
So the best that can be said of the above figures including cost is that they are the best guess made from limited information but yes ESA provision does cost more than a rent officer determination (ROD) on what would be paid in general needs housing!
Significantly, on page 70 of the research report it derives this figure from what ROD would agree to pay compared to the 1 bed LHA rate. And while the governments own LHA page says LHA is not suitable for supported housing - (see
- LHA now forms the basis of the 3 new proposals as replacements for HB in ESA
These 3 proposals are: -
1. LHA alone
2. LHA plus a standard percentage (LHA+%), or
3. LHA plus a fixed cost for each added service cost (LHA+FC)
All of the above presume that the £70m – £130m per year ‘added cost’ of ESA rent is correct. That may not be the case at all as not all ESA provision would receive the 1 bed rate. For example the under 35s may only receive the shared room rate, which is lower, and as LHA is based on composition of family size, those in homeless families units and DV refuges could receive the 2,3 or 4-bed LHA rate which is much higher. Single people with disabilities who require overnight attendance are also entitled to the 2-bed rate which is significantly higher.
It could be the case that just replacing all ESA rents with LHA will see the overall bill rise as the figures claimed of the added cost of ESA are just estimates. The research paper itself says on page 70 “Where LHA is very high, even supported RSL accommodation has a much lower cost than local private rents..” – and that finding is based on the 1-bed LHA rate.
So how did we get here? The DWP must believe that overall ESA rent is higher than the equivalent private sector LHA rent, yet it can only suspect this and can’t know this.
Yet the ‘consultation paper takes this as a given despite the research report and states on page 6 at 4 that “We want to understand what makes rents in this sector higher than for those in the private rented sector and whether it is reasonable to meet these rents through benefit.”
To radically change the funding system and create so much uncertainty and instability to vulnerable people based on a suspicion and to impose a new system on that hunch (which it rewrites as a definitive statement!) …..hmm!
Let’s not forget that LHA is paid for general needs housing as private landlords cannot use the ‘exempt accommodation’ HB provisions and so the government is seeking to replace social housing ESA funding provision that includes the costs of staffing and furnishings in a refuge or hostel for example, with the standard rate it pays private tenants and private landlords for unfurnished and unstaffed accommodation
In a separate discussion on this I show with real figures from hostel and refuge providers that even with LHA+40% these will see a loss between 24 and 65% – see
Bizarrely the ‘consultation’ paper wants private landlords to enter the market yet why would any PSL take on board the extra cost and extra risk of ESA provision at the rate it now gets for unfurnished and unstaffed provision? At 46 it states “We want to include private sector housing as we look to target help more by accommodation type rather than type of landlord.”
Anyone thing a PSL would find it reasonable to accommodate higher housing management risk residents, have higher repair cost with shorter repair resonse times, furnish a property, provide staff on-site for safety and security purposes etc…. all for the same income they get know for none of this? Clearly the DWP think this is reasonable!
In summary, this ‘consultation’ paper creates massive uncertainty and change to vulnerable people based on the highly spurious rationale that paying HB to social landlords for exempt and supported accommodation is not reasonable.