SAR – An open letter to Grant Shapps

I have today emailed an open letter to the Housing Minister Grant Shapps with regards to the SAR issues I have raised in a few blog posts this week.  As the Minister likes openness and transparency I reproduce the text below.

Re: Ministerial Working Group on preventing and tackling homelessness

Dear Grant Shapps,

I write in your capacity as Chair of the above MWG in relation to the Shared Accommodation Rate and the impact of the SAR on homelessness.  I ask you share the above with all attendees of the MWG and make this matter an agenda item for the next MWG.

I note the publication of the attendees and terms of reference of the MWG as well as the minutes of the meetings since June 2010 that have been published this week.  I welcome this level of transparency.

The terms of reference transparently state the aims of the MWG to be:

The aim of the Ministerial Working Group is to prevent and reduce homelessness, and improve the lives of those people who do become homeless. By bringing the relevant Government departments together to share information, resolve issues and avoid unintended policy consequences, we will be able to help enable communities to tackle the multi-faceted issues that contribute to homelessness.”

I have highlighted two aspects above that apply directly to the HB reform of increasing the SAR age criterion to those 34 and under and this open letter addresses two principal aspects of this and how it directly affects single homeless persons in hostel provision. I note from reading the minutes that the SAR HB reform has to date not been an agenda item.

1.  SAR impact on homelessness – the ALOS issue

The SAR includes an exemption for those that have been resident in a hostel and received support there for a period of 3 months.  Given that the majority of single homeless hostel residents are 34 and under the SAR creates policy, however unintended, for such provision by requiring a single person to reside in a hostel for 3 months and this creates many problems that directly work against government policy.

(a) It means that the capacity of each hostel is limited to a maximum of four persons per year per hostel space.  So a 10 bedded homeless hostel will have a maximum capacity of accommodating and supporting 40 single homeless persons per year.

(b) This maximum capacity issue reduces over all capacity as many single homeless hostels currently have an average length of stay (ALOS) for residents of less than this which means they currently have a capacity greater than this.  A real example is a 24 bedded unit for 18 – 30 year olds that last year accommodated and supported 204 single homeless persons. This year its maximum capacity becomes just 96; this reduced capacity being 24 rooms x 4 persons per year and as a direct result of the SAR change.

(c)  The above real example is illustrative of a direct cause and effect.  If existing hostel provision has an ALOS of less than 3 months then capacity to accommodate the rising numbers of homeless and rough sleepers is reduced, and at a time when demand for such provision is rising.

Before I continue with many other significant aspects of the SAR change the general point about average length of stay (ALOS) at single homeless hostels nationally is easy to confirm.  The data that CLG hold from all Supporting People contract holders can be analysed readily for the throughput figure for each single homeless hostel against its capacity.  If the overall number of clients accommodated (throughput) is greater than 4 times the capacity of the service it means that the average length of stay is less than 3 months.

For every such service that has an ‘ALOS ratio’ of greater than 4 the SAR changes mean a likely reduction in capacity will ensue because of the SAR change.  A distinct reduction will be the case if the hostel service uses the PRS for move-on and if the age group of the single hostel service is under 35.  With the lack of shared and 1 bed accommodation in the social rented sector a known undersupply and the likely use of the PRS already the extant position it is likely that PRS use for ‘move-on’ is already high.  The increasing demand due to the under-occupation HB reform for social housing 1 bed provision adds to the scale of the ‘move-on’ issue and will become a greater operational problem.

(d) The overwhelming majority of single person hostel providers will hold a SP contract which will have been commissioned on the basis of past performance or targets.  Local SP commissioners will wish to see at least the same 204 persons accommodated and supported, yet will see just 96.  This 53% reduction will cause much consternation and risk to survival of such services.  Even if hostel providers don’t have specific targets for throughput or contractual targets all have an implied assumption of delivering at least the same service to at least the same number of vulnerable single homeless persons as the previous year.  The SAR changes directly prevent this.

(e) Local authority SP monitoring has always looked at the cost per person supported. If for the ease of argument the service above received £204,000 in SP funding per year, or £1000 per capita for the 204 clients supported, the same £204k of funding becomes a per capita support cost of £2125 – a staggering 112.5% increase.  The apparent value for money issue this raises will mean that provision of accommodation-based single homeless hostels will be significantly threatened and exposed to decommissioning and again at a time when homeless and rough sleeping figures are rising and so increasing demand.

(f) Hopefully the above outlines the general position and concern.  However one final point is that the impact of the SAR change is not just limited to single homeless hostels but also to domestic violence and abuse refuges.  Private research from the refuges we advise reveals that many single women without children and aged under-35 access refuge and this can be as high as 30 – 35% of all clients there.  The ALOS figures we hold reveal a typical length of stay of approximately 2 months currently meaning a 10 bedded unit had a throughput of 60 women last year yet this year the maximum capacity reduces to 40.  The same exemption from the SAR applies to DV refuges as to homeless hostels and the same SP funding and financial sustainability issues apply.  I am sure it was not the intended policy of the government to reduce capacity to domestic violence refuges yet this is the direct impact of the SAR HB reforms

In summary on this ALOS issue the terms of reference aims of the MWG expressly state the remit to avoid unintended policy consequences to those people who do become homeless.  There is an undoubted operational remit for the MWG here to address this issue and a need to clarify or amend the position on exemptions from the SAR.  None of these issues raised above were included in the impact assessment on the SAR change yet it will directly impact in these areas.  The additional cost implications to the public purse of increased use of B&B, paying for new and additional temporary accommodation provision and other costs of homelessness are readily apparent from the SAR reform.

I ask that comprehensive clarity of consideration and response be given by the MWG to all the matters here and associated ones.  For example there is an increase in the use of fully self-contained provision for single homeless clients in recent years.  Can you confirm whether the SAR exemption from ‘hostels’ would include such provision given that by being self-contained they do not conform to the HB regulation definition of a ‘hostel?’

2.  Will the SAR apply to social housing?

Firstly, I agree the SAR impact assessment states it will only apply to the PRS.  This is however not the issue.

The impact assessment on the under-occupation HB reform states that social housing will replicate the PRS position and how LHA applies to PRS tenants.  Because to all intents and purposes the SAR is an under-occupation issue based on size and age criteria the wording of the impact assessment on under-occupation could, however unintended, apply to all social tenants after April 2013. It says:

From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules”

I posited this argument in a blog last week and it was met with consternation from across the housing sector.  The blog not only attracted 15 times the views of other blogs but led to my receiving over 300 emails from all quarters and all levels of the housing sector that agreed with my view that it could apply from this wording.

Also agreed unanimously was that if the SAR was to apply to social housing as it does already to PRS tenants, the impact would be disastrous to all aged under-35 leaving no viable rented options.

However, in the context of this MWG, I have outlined the impact of the SAR changes to homelessness above assuming it doesn’t apply.  Yet if it was to apply it would mean that there is no viable ‘move-on’ option for any client aged under-35 from homeless hostels.

This also means that a 3-month length of stay at a single homeless hostel becomes the minimum length of stay nationally for all aged 34 and under.  In short, the SAR HB reform unambiguously reduces single homeless capacity by a huge percentage.

I have appended the blog posts for completeness and do not need to discuss the impact of the SAR applying to social housing after 2013.  Rather, there is an absolute need for urgent clarity on this matter just for the impact it would have on homelessness.

I await your considered response.

Yours etc…

I have received the standard response by email which states:

“Thank you for your email to the Rt Hon Grant Shapps MP, the Minister for Housing and Local Government at the Department for Communities and Local Government.

Our aim is to consider the issues you raise and to respond within 15 working days.”

We shall see…

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4 thoughts on “SAR – An open letter to Grant Shapps

  1. “the SAR creates policy, however unintended, for such provision by requiring a single person to reside in a hostel for 3 months and this creates many problems that directly work against government policy.”

    Doesn’t it only have this effect if hostels extend the length of stay to 3 months+ in order to qualify the person for the self-contained LHA rate? You are assuming that all providers would do this; would they? The government clearly intends under 35s to go into shared accommodation. I can see that some providers might try to do this, to help their clients, but as you point out above, this would have all sorts of unintended consequences, including not helping as many clients as they otherwise could.

    Dave Merritt
    King Street Housing Society
    Cambridge

  2. Do hostel providers have any viable choice in this? You can view this is so many dimensions.

    (a) Will hostel residents want to stay for 3 months to qualify for a self-contained property? Probably.
    (b) Will Joe Public want groups of former hostel residents living next to them in a converted HMO? No.
    (c) Will LHA SAR levels even cover cost of shared rooms? In Stoke its £46pw and only £55pw in Birmingham and across much of NW, NE and Yorkshire. No it wont.
    (d) If hostels do move on before 3 months will those clients likely be homeless soon because of arrears and AST ended? Yes.
    (e) When this happens will this be picked up by SP monitoring? Yes – and so providers runs risk of reputational damage by repeat clients being perceived as happening due to lack of quality of ssupport preparing them for independent living.
    (f) Should providers take that risk – No.
    (g) How much shared social housing provision is there? Very little. Is this likely to increase to meet demand? Probably not.

    The above all assume that the status quo remains with PRS landlords too and that is a naive and errant assumption. Will private landlords be more reluctant to accept benefit claimants from hostels than before?
    Yes they will be more reluctant because of SAR change as it now incorporates 25, 26, 27, 28, 29, 30, 31, 32, 33 and 34 year olds. Yes because of LHA freeze in 2012/13. Yes they will because of LHA increases being less than CPI in each subsequent year.

    Will social landlords be less likely to accommodate? With 180,000 under-occupying 2 bed properties and only 68,000 yearly new 1 bed lets, this added competing demand will restrict move on supply.

    I could go on with many more reasons why providers would be wrong to move-on vulnerable clients in less than 3 months.

    There may be some areas of the UK that already have a high % of PRS accommodation and take benefit claimants and hostel providers will have less problems. Blackpool for example has 71% of all HB claims in the PRS against a national average of 32%; yet Cambridge with just half this national average of 16% will struggle.

    However, the above reasons off the top of my head, will see huge problems with supply of move-on reducing and with the operation of moving people on to almost inevitable tenancy failure and repeat homelessness because SAR levels wont even cover shared rent cost. The SAR change if it applies to just PRS adds a further 88,000 persons at risk, if it applies to all under 35s it places 265,000 current HB claimants 25 – 34 at risk. That is huge demand on shared accommodation provision and a huge further risk to homeless numbers.

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