Down (and out) by the Riverside – LHA maxima charade again

When the Chief Executive of Riverside, one of the largest supported and sheltered housing associations in the country does not get the LHA maxima policy of this Conservative government, it’s time to pack up and go home!

An article by Carol Matthews CEO of Riverside in today’s Inside Housing of the usual diplomatic and deferential type we have come to expect from the apathetic housing sector is painful to read for anyone with a modicum of knowledge of the supported housing sector and the LHA maxima policy as she claims:

Government has said that this is not a cost-saving exercise, and this needs restating.

That is a major mistake as the government has not said this and the direct opposite in fact and stated the policy is a cost cutting measure in the Comprehensive Spending Review documentation that accompanied the announcement of the policy as page 119 of the Blue Book shows:

blue bookp119 csr 2015

Despite the Office of Budget Responsibility (OBR) saying they have a medium to high level of uncertainty on these figures (!!!) there is no doubt whatsoever that a cut and saving is expected by government, this is no cost neutral issue at all.

The original July 2011 consultation on housing benefit costs in supported housing which contained the original version of the LHA maxima policy was at pains to say it was cost neutral and not a cost-cutting exercise, yet that hastily dropped DWP consultation paper had this as one of 3 proposals, the other two being LHA (maxima) plus £20 per week and LHA (maxima) plus £40 per week.

Quite how Carol Matthews and Riverside could be under the hugely errant assumption that today’s LHA maxima policy is not a cost-cutting exercise beggars belief … yet typifies the housing sector unfortunately!

This is more than just a stupid mistake however as what flows from the flawed premise of this not being a cost-cutting exercise is (a) Carol Matthews believes the LHA maxima not to be an issue of ‘financial privilege’, and (b) Lord Richard Best can do anything about it in the Lords.

BECAUSE the LHA maxima policy does intend to save money on the HB budget, even if it was part of any Bill, which it is not, it could be steamrollered through parliament just as the bedroom tax as after the Lords made 7 (or was it 8?) amendments to it.

HOWEVER as it is not part of any legislative Bill at all the government can implement by Statutory Instrument in any case which leaves the only challenge to this of a prayer!

Even if the House of Lords responded to a prayer to it over the policy, the government could introduce using financial privilege in any case!

I would direct Carol Matthews, Riverside and anyone else involved in supported and sheltered housing to what the CSR Blue Book actually says (which the DWP has subsequently confirmed in parliamentary written answers from 7 to 14 December 2015 – that the policy IS going ahead and that the government has set aside increased DHPs in a (derisory and risible) attempt to mitigate these huge cuts.

bluebokkp36 lhamaxima

Page 36 of the CSR Blue Book as above says

  1. at 1.125 the LHA maxima IS the policy and
  2. at 1.126 confirms the policy will have added DHPs that DWP subsequently confirmed will be £35 million per year, and
  3. at 1.127 that the LHA maxima policy IS part of the £12 billion ‘welfare’ savings which means to change the policy CLG has to win over IDS at DWP and Osborne at HM Treasury!!

NOTHING said to date from the DWP or from HM Treasury contradicts this and everything stated confirms it!

This rest of this article is Panglossian delusion and incredulous acceptance of what the CLG department of government are trying to push – that they can somehow influence the LHA maxima policy after the IPSOS MORI research project.

Firstly, IPSOS MORI were awarded the contract in December 2014 some 14 months ago and the terms of reference included a full scoping of it back to DWP in 10 weeks.

Secondly, the ToR also includes that IPSOS MORI report back to DWP at least twice monthly so it will have done that 28 times to date at least.  As such the CLG position which Carol Matthews accepts is incredulous political spin and frankly total bullshit.

Thirdly, this has to be the case as the same DWP were informed how the LHA maxima would impact back in late Autumn 2011 after it was first proposed in the July 2011 consultation.

Moreover, the LHA maxima policy IS a welfare benefit policy and comes under the auspices of IDS at the DWP and it was announced by the Chancellor and hence has HM Treasury approval in the Autumn Statement.

I do wish Carol Matthews or any other housing leader that has this Panglossian belief in the powers of Greg Clark at CLG to win over IDS and Osborne at cabinet level would say how they imagine he has a hope in hell’s chance of doing so, because he simply hasn’t.

In summary, while Riverside will want to issue hopeful statements over the LHA maxima issue in order to reassure their funders of the tens of millions per year of HB cuts this means to Riverside (ECHG) supported and sheltered housing services, the fact its Chief Executive does not know simple critical facts of the policy means that Riverside is selling itself and the supported housing sector down the river with this incredulous and errant article.


The Carol Matthews thinkpiece from behind the Inside Housing paywall is below.

The government’s announcement at the end of last month of a year-long concession on rent reductions for sheltered, extra care and supported housing is a welcome step in the right direction.

For Riverside this means greater security for over 8,000 tenants living in schemes that make up the most financially marginal part of our operations, with many schemes cross-subsidised from elsewhere.

And this is not a result of inefficiency – our care and support services sit in one of the most efficiently-run parts of Riverside, which has had to respond to a torrid succession of funding cuts over the past years.

It’s simply because the provision of housing management and maintenance services are 30% higher than the equivalent for mainstream housing, linked to high re-let costs – many schemes turn over two or three times a year – significant amounts of wear and tear, and the time it takes to undertake routine management tasks with vulnerable residents. Of course, the historic cost of provision is usually so much higher, too.

Grand ambitions

This is why the case is overwhelming for treating tenants living in this type of specialist housing differently in the benefit system, and it is good that the government has listened.

However, we are only part of the way there, with the bigger threat of Local Housing Allowance (LHA) caps for all social housing tenants still casting a long shadow. At the close of the heady day of parliamentary debates recently, National Housing Federation chair Baroness Warwick was right to point out that the government had two opportunities to specifically reassure the sector in the face of concerted pressure, but had failed to do so.

But I sense growing momentum, with the government going on the record about bringing forward with urgency “appropriate protections for those in supported housing”. Lord Best, who has done so much to support the sector and secure the rent concession, suggested that government will eventually move to address the LHA issue, perhaps when the current “fuzziness” about numbers becomes clearer.

So the focus of our attention now needs to turn to the review of the whole system of costs associated with supported, sheltered and extra care accommodation, set up when government realised that the blunt rules of Universal Credit would not do. So what do we know?

We know that Ipsos Mori has been appointed as lead contractor to establish a baseline position, reporting in March – just how much of this accommodation is out there and how much does it cost, especially in terms of the benefit bill? This will then be used to inform decision-making about policy, which if it is to ensure that a clear position can be established for next year’s rent variation and budgeting processes, will need to be in place by Christmas at the latest – already sounding ambitious to me!

Going into the review, I think housing associations and those commissioning services need to be looking for four things:

  • Complete transparency of process, and the meaningful involvement of the providers and commissioners. Given what was said in the Lords, I think we’re already on a promise, however we need to ensure we are at the centre of the review, rather than on the periphery;
  • That whoever administers a new system going forward, it needs to be based on the principle of basic national entitlement. One option would be localisation, however it would be outrageous if general needs tenants who meet national criteria are automatically entitled to state support, whereas vulnerable tenants living in specialist accommodation are only entitled to support if they meet local, politically set, criteria and if there is enough cash;
  • That the system is adequately funded and protected. Government has said that this is not a cost-saving exercise, and this needs restating. Too often we have seen the localisation of budgets accompanied by centrally-imposed reductions. And if funding is localised, it needs to be ringfenced;
  • That some form of uprating mechanism is built in, so the funds available grow to meet changing needs and we can avoid returning to this issue year after year.

Of course, some sort of efficiency test is also needed. The Department for Work and Pensions will demand no less, and we need to show that we understand this, albeit in a nuanced way.

So let’s prepare for an interesting year. It will go quickly, and while rent reductions may be off the agenda (for now), and hopefully LHA caps too, we need to deploy our expertise and evidence to ensure we don’t jump out of the frying pan and into the fire.

Carol Matthews, chief executive, Riverside


6 thoughts on “Down (and out) by the Riverside – LHA maxima charade again

  1. Hello Joe, on the subject of Bedroom Tax, if an HB claimant appeals against it, and the HB Department decides to take the claimant to the First-tier Tribunal, who is actually paying for the staff time that it takes to draft an inch-thick Submission? Is it Central Government through a grant to the Council, or the local citizens through their Council Tax payments? If it’s the latter, then could the HB Department decide to drop the appeal and justify this by saying it costs too much and is therefore disproportionate and wasteful of local citizens’ money?

  2. Hello, this is slightly off-topic, but I’m a Riverside tenant and have just been sent notice that from April I’ll have to start paying a service charge. I’ve been in this house for 10 years and do not receive any services whatsoever. They claim is is something to do with ‘inspecting the maintenance of communal areas’ but there are no communal areas associated with my house – the grass verge by the road is maintained by the City Council, and has nothing to do with Riverside. Is it possible they are introducing this arbitrary charge as a way of making up for the 1% cut in rent?

    1. If your tenancy agreement does not mention service charges then how can they introduce a new service charge after 10 years? Rather than speculate why they are intending to introduce, I would question are they ABLE to introduce!

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