LHA Maxima Cap (consultation) -Part 1 :Not just wrong but dangerous

The current consultation paper on the funding for supported housing is not just a mess it is dangerous and in the four following areas:

  1. Is Sheltered Housing supported housing?
  2. Why no consultation on the affects on general needs social housing
  3. The commissioning process
  4. Universal Credit

In this part 1 of 3 proposed posts I discuss Question 1 above and in some depth and Part 2 will focus on Question 2 above and part 3 will discuss points 3 and 4 together.


I aim this series of posts at the housing professional audience and therefore assume some level of knowledge of the Byzantine world of ‘supported housing’ which has always been in funding terms a mess and which HB regulations have a very specialist subset of rules and regulations for which even sees some HB staff not trained on or knowledgeable of which, in part, only apply to certain forms of the umbrella term that is “supported housing” and not to other parts of it.

If you can follow that last sentence reader then read on if not ignore it and its easier to get on with it …

  1. Is Sheltered Housing supported housing?

I have chosen to start with the sheltered housing question for two main reasons.

(a) The first is that the comments and papers I have read to date on the LHA Maxima consultation everyone assumes that ALL forms of sheltered housing are included in the consultation when I posit strongly that this is NOT the case.

(b) The impacts that dangerous assumption has which are extremely concerning

Sheltered Housing is an umbrella term for three broad types of provision that used to be called Category 1, Category 2 and (at first) Category 2.5 … which is now more commonly called Extra Care.

  1. Extra Care is 100% included in the LHA Maxima proposals and is de facto supported housing.
  2. Category 2 sheltered housing – meaning essentially resident warden provision – can be strongly argued to be included in the LHA Maxima consultation and be classed as supported housing which it is.
  3. Category 1 sheltered housing, essentially non-resident warden sheltered housing is NOT NECESSARILY included in the LHA Maxima proposals for supported housing as its levels of support are de minimis – in plain English of such a low level – that means Cat 1 sheltered does not come under the old HB definition of “exempt accommodation.”

When a supported housing provision provides such low levels of support to be called de minimis and the support is provided by the landlord, then there is no doubt at all that such a (Cat 1) service does not meet the very specific “exempt accommodation” definition in HB regulations.

Those same issues also mean that such as service also does NOT meet any of the three additional categories in the more recent “specified accommodation” labelling as found in housing benefit regulations via circular.

As such Cat 1 sheltered can be seen to NOT be (a) supported housing or (b) exempt accommodation or (c) specified accommodation and is therefore simply general needs housing.

IF such category 1 sheltered housing is merely general needs housing then under the LHA Maxima policy proposals including the current consultation any current excess rent level over and above the LHA Maxima cap limit does NOT go into the funding pot a la SP Mark 2 to be redistributed through the commissioning process.

I urge all social housing professionals to very closely look at the LHA Maxima Cap consultation and to what is precisely stated there rather than assume that all forms of sheltered housing are included and all excess rent above the LHA Maxima levels does go into the new pot of ring-fenced funding.

If you do you will see, and can only see, ambiguities in its wording and there needs to be 100% absolute clarification from the DWP (and DCLG) on the very specific points I make concerning “Category 1 sheltered” housing.  IF no such absolute clarification is received then the risk of the LHA Maxima created pot is far too great a risk for the survival of Category 1 sheltered housing which is the most numerous for of sheltered.

The issue is not whether there will be a suitable level of and certainty of ongoing revenue funding for new sheltered developments but of whether existing sheltered is financially viable or not.

I may have the very specific points I state above wrong, yet I do not think I have and I truly hope I am wrong on them, yet I suspect I am not.

I also maintain that the DWP must be aware of the issues I raise too and I say that without cynicism or any hyperbole. I say this because the DWP is aware that ever since the numerous cock-ups with Supporting People (that all stem from Q3.4 of part 3 of the SP3 form and service type) which removed many resident wardens especially in smaller schemes taking them from Cat to Cat 1 sheltered … that social landlords have been seeking and receiving additional housing benefit to mitigate the support funding deficits that SP created, and created long before the (unbelievably stupid) SP ring-fence removal from 2009.

The DWP bean counters believe that social landlords have been claiming more in HB in these specific Category 1 sheltered schemes and those increased levels of HB have been met by LA HB departments being passive and paying them, unlike any requests they receive for higher HB in say homeless hostels or other NIMBY supported housing services.

One problem the DWP sees with the existing system is social landlords can put as many bells and whistles onto sheltered housing provision they like in the knowledge that these will mostly be seen as HB eligible costs and thus central government pays for.  In short the HB eligible expenditure in all forms of supported housing but especially in sheltered housing has been provider led with little control that can be applied by central government.

While sheltered housing is not exclusively the pensioner it benefits from the special status that pensioners are accorded in political terms – the don’t upset the pensioner as they vote argument which holds true generally, and especially seen until now at least in austerity and ‘welfare reforms’ which all exclude the pensioner and attack only those of working-age.

This has manifest in levels of housing benefit paid out to sheltered housing in recent years and which the official HB data shows starkly as the average amount of HB paid to the pensioner in comparison to the average paid to all HB claimants (including the private sector) has risen from 88.7% in 2010 to 98.7% in the latest August 2016 figures.

As such there is stark evidence in the HB data that can ONLY mean that HB levels for pensioners in social housing have risen by 11.27% when the comparison for all social housing HB to overall average HB has only increased by 7% in the same period.  That 50% more cannot have come from social housing pensioner HB levels in general needs housing or even from affordable rent levels and can ONLY have come from much higher levels of housing benefit in sheltered housing.

I have studied housing benefit and HB data for all my 24 years in social housing and HB data in an inordinate geeky level of depth ever since 2010 when HB was singled out for £2 billion per year of cuts in real terms by the Tory-led coalition. I have rarely looked at sheltered HB data as sheltered housing with its perception of being the pensioner has not seen the ravages of HB cuts elsewhere.

I have private anecdotal and first-hand knowledge of social landlords as clients who have over recent years ought and received significant levels of additional housing benefit for their sheltered housing.  Those landlords have quite rightly said and come to a position of we are no longer going to cross subsidise our loss making sheltered housing services out of general needs rents which is just one of the by-products of the SP programme.

Until the last week I never sought to interrogate the HB data for evidence of this because older persons benefits are seen as untouchable until now.  Yet as I explain above there is strong evidence in the HB data to suggest that sheltered housing rent levels have been rising significantly – and again I stress quite rightly as the rents charged should cover the costs and general needs social housing tenants should not pay more to cross subsidise.

Yet If I can see a very good correlation in the HB data and rising sheltered housing rents then bet your life the DWP and their number crunchers will also have done!

This again just like the LHA Maxima Cap policy is only likely to affect the regions and not London given its perversely high private rents and accordingly perversely high LHA rates.  Hence housing associations with higher than average sheltered housing numbers in the regions need to especially look at the issue of whether their sheltered schemes are in fact covered by the LHA Maxima top-slicing into a new pot or not.  IF my explanations above do hold then some very large housing associations become very financially exposed to the LHA Maxima Cap proposals for supported (but not necessarily all sheltered) housing.

Even if I am wholly wrong on the Category 1 sheltered posit above, the government are clearly seeking to reduce and peg back what they perceive as excessive sheltered housing HB rises which the HB data does show and for once the reason for this can be laid at the door of the chronic supported housing policy through the SP programme of the last lot – the Labour government from 2003 to 2010 that first saw many resident wardens become unaffordable and then the bloody stupid ring-fence removal from 2009.

Finally, none of the above is my ‘having a go’ at housing associations which I often do though I prefer to call it constructive criticism.  The evidence IS there in the HB data of significant HB increases in sheltered housing and the only other possible explanation is that all affordable (sic) rent ‘products’ go to the pensioner which is clearly false; and as I stress above it is quite right that sheltered housing funding is transparent and is not cross subsidised by general needs tenants.

Anyone who takes the view that the DWP (and HM Treasury) is not seeking to arrest the increase in sheltered HB rents and is not seeking to cut sheltered as well as supported housing rent levels is doing themselves and their vulnerable tenants a huge disservice in such a naive view.

It is HA’s and not in the main council landlords at risk from the LHA Maxima proposals for sheltered housing too as the rent levels reveal in every choice based lettings portal I have seen for all regions across England, and mostly limited to England too and not a significant issue in Scotland or Wales.

In England some HA’s have negligible sheltered housing stock while others have much more as a proportion of total stock so dear housing professional just because your HA may not be significantly affected, then ask your colleagues in other HA’s and you will find that they are.

I just thought I would end on that naive note that housing professionals can for once see past the all too familiar housing think error that the impact of policy X Y and Z on them is not the same as other HA’s in their region or outside it. There are 340+ local authority areas in England alone each with at least one housing market and separate housing variables making hundreds of housing markets that all need to react and operate differently instead of the one perceived homogeneous approach and operating conditions for the nonsense that you call the universality of a ‘sector’ ….

… If the above makes you think wait till Part 3 and the real dangers that the proposed commissioning process will bring in this LHA Maxima Cap farrago…of which length of ring-fence is the least of the dangers!


8 thoughts on “LHA Maxima Cap (consultation) -Part 1 :Not just wrong but dangerous

  1. Could you clarify a couple of things: first, when you talk about the average pensioner HB as a percentage, is this a comparison of the average HB received per household in pensioner households as a percentage of the overall average. If so, could the increase not be for a range of reasons, eg an increase in pensioners occupying the larger houses as they age, coupled with an increase in the preponderance of smaller properties allocated to new younger households. And it could also reflect shifts in average incomes of the two demographics. It must also include the effect of the bedroom tax in suppressing the relative amount paid to the working-age household.

    Secondly, you talk about where non-resident warden sheltered housing fits in the categories. A common model, and the one used by my housing association, is to allocate a proportion of housing to people with support needs of some kind, and to employ a number of housing support workers. In my HA they are effectively cross-subsidised – or were, until the support workers were sacked to pay for the losses incurred through the 1 percent year-on-year rent decrease! A number of third-sector mental health services have a model where they provide both housing and floating support workers. Where does this model fit? – the support worker is not a warden, and the service is not necessarily tied to specific accommodation. I think these are the providers who have a lot of uncertainty.

    1. I could easily draft 5000 if not 15000 words in discussing your first point about the HB levels paid to pensioners and I will address the wider area of government seeking to make policy to combat the replacement of support costs through increased HB in sheltered housing which this policy attempts – and which I am sure housing associations (and council landlords) do not want to discuss as it would mean accepting the premise that they have been doing this.

      Your second point about models – Governments whether Labour under the SP regime or the Tories now always want to pigeon-hole and distil models into as few as possible when there are many variants alone of just the floating support model, which is also a misnomer in itself as in many cases and with many vulnerable tenants the support need never floats away but is permanent. The initial SP simplified this in two models of accommodation based and non accommodation based for the 14 allegedly homogeneous SP client groups (!!) and then the Audit Commission into three (extremely) broad model areas for inspection purposes and even providers into sheltered, supported and supported living model labels when each of those terms is hugely subjective and often very differently perceived and interpreted in each case.

      Supported housing is Byzantine in its complexities and Part 1 above just focused on 1 area to show that even social landlords primary concern over sheltered housing has not been more than superficially touched upon in responses and articles to this consultation. Hence the many more smaller specialist support services delivered by third sector providers one of whose ‘models’ you raise barely gets a look in.

      I posted Part 2 today (which explains the backdoor bedroom tax for pensioners even those who do not under occupy) and Part 3 will look at models and in some detail vis-a-vis the proposed commissioning process and will focus on a number of broad client groups and how each will fare compared to others and will in part answer your question over your model. Yet from working with and advising almost 300 providers in SP and pre and post SP I can only barely touch on generic issues highlighted with example and explanation of the literally hundreds of complexities and problems that the LHA Maxima policy will throw up and especially for smaller specialist supported housing provision – and with a general theme of the LHA Maxima policy has to be abandoned as it is unworkable even in theory.

  2. I was just glancing over the consultation paper, and it says of the current arrangements: “People living in specified accommodation are eligible to continue to receive Housing Benefit in respect of their housing costs, even where they claim Universal Credit, and the housing support paid through Housing Benefit does not count towards the Benefit Cap.”

    Nowhere in the paper does it clarify whether the Benefit Cap will apply to Housing Benefit (or the housing component of UC) under the proposed new arrangements. One suspects that it would, since one of the stated purposes of the new arrangement it to bring them into line with UC and presumably to abolish any exemptions (other than the SAR) in favour of the new “top-up”. This would mean that residents and providers of refuge and short-term homeless accommodation (ie those services dealing with families) would still be affected by the benefit cap.

    In addition, I note that at one point in the paper it states that some types of accommodation are acknowledged to have higher service costs (eg due to high wear-and-tear – again the norm in accommodation such as refuges and hostels, but also half-way houses etc). Yet the new arrangements include these service changes in the housing component to be restricted to the LHA max rate designed for general needs accommodation – not in the proposed “top-up component”.

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