Huge LHA Maxima Cap financial risk to EXISTING sheltered housing

Currently we have a consultation paper about how the government plans to change the housing benefit funding in supported housing.  The consultation paper is frankly a mess and holds many huge aspects of financial risk that I maintain social landlords are not fully aware of.

Here I posit that sheltered housing is NOT (necessarily) supported housing and holding that errant view is a very costly one indeed and will inevitably lead to the closure of EXISTING sheltered housing when all of the housing focus is on the policy meaning no more FUTURE new sheltered housing.

The LHA Maxima Cap policy as it applies to supported housing – a very complex term – puts in place what has been dubbed as SP Mark 2, a commissioning driven way of funding support and on the (highly spurious and highly superficial) basis that local commissioners know local needs best.

They, the Commissioners, don’t know as SP Mark 1 clearly proves and even if they did it does not follow that they would commission those services most in need.

In short the commissioning process doesn’t work and in this context is little more than blame deflection for central government taking away the right of vulnerable people to have their housing needs met by right as they have under current HB funding.

Make no mistake this 2017 incarnation of the LHA Maxima policy is not the same as the 2011 version of it that was quickly abandoned and rightly and was at pains to say it was cost-neutral or no overall HB cut: This 2017 version of the LHA Maxima is a huge cut in housing benefit an is not cost neutral at all.

The LHA Maxima cap policy as it affects supported housing is the subject of the current consultation paper yet the same LHA Maxima cap policy affects general needs housing too and is NOT part of this or any other consultation paper.  So if some parts of sheltered housing are NOT supported housing but general needs housing, which I what I posit here, then there is a huge problem.

To explain this very complicated area and even to social housing professionals I have just looked at a sheltered housing 1 bed flat in Wirral in Merseyside that is advertised by a social landlord on the choice based lettings portal for most of Merseyside that is called PropertyPool.  I use this as illustrative to explain.


As you can see this 1 bed property says it is sheltered housing and has a weekly gross rent level of £131.31.  The 1 bed LHA rate to which housing benefit will be limited to in Wirral is £86.30 which leaves a £45.01 per week shortfall as the LHA Maxima policy will cap the housing benefit at £86.30.

If we look a bit deeper at this gross rent level and the property we find this:


The devil is always in the detail and I have highlighted two points here of (a) the service has no resident warden, and (b) the breakdown of the gross rent figure of £131.31 per week.

As there is no resident warden there is an issue as to whether this sheltered housing property is supported housing or not.  The absence of the resident warden does suggest the level of support is de minimis – in lay terms insignificant and low – which is a specific term that means the service is not another specific HB term of ‘exempt accommodation.’  Yet does this de minimis level of support mean that the service is more correctly called general needs housing and not supported?  I suggest the answer is YES it does mean the property is not supported housing

IF the service is not supported housing then the current rent charged above the LHA Maxima Cap limit of £86.30 does NOT go into the cash limited pot to be given back to this service by the local council in the commissioning process dubbed SP mark 2.

The breakdown of the gross rent figures mean that currently housing benefit pays all of the £131.31 per week less the support charge of £5.35 which is ineligible for HB to pay.  In short HB pays £125.94 per week and the tenant pays the £5.35 per week support charge from his or her own other income.

IF the service IS classed as supported the £125.94 that is currently paid as right to the tenant in HB reduces to the LHA Maxima of £86.30 per week and the difference of £39.64 goes into the support pot to be administered in a form of Supporting People Mark 2 system.

Yet IF the service is classed as general needs housing and not supported housing due to the de minimis level of support then the housing benefit is simply cut by this £39.64 meaning the tenant has to contribute this in addition to the £5.35 they already pay.

This means that the pot for ‘support’ funding is less than anticipated and this service becomes wholly non financially viable to any sheltered housing tenant on welfare benefit and who is not  self-payer.

This means that existing sheltered housing is at huge financial risk and not just the financial risk the LHA Maxima cap gives to future new sheltered housing being built but also to existing sheltered housing’s survival.

A service in the absence of a resident warden and with de minimis level of support because of that could still be classed as supported housing IF and only if it falls into one of the three categories of specified housing which is yet another term in this complex arena.

Category 1 specified accommodation is exempt accommodation which this service is clearly not.  Category 3 is DV refuges which this is not. Category 4 is homeless hostels which this service is not.  As such to be classed as supported housing the service above which I use here for illustrative purposes has to fit into category 2  of the specified accommodation rules.

Category 2) Supported accommodation where the claimant has a) been admitted to receive care, support supervision and b) does indeed receive care, support and supervision.

The above definition comes from here and correctly records what the regulations say and I have highlighted the word ‘and’ as both parts of this need to be true for the service to be classed as supported.

As to part (a) we can say that this is highly probable and likely and the tenant would know this condition of tenancy.  Yet part (b) means that every sheltered tenant in this de mininis and non warden controlled service has to actually receive care, support or supervision which is not likely and which is not the rationale of this type of sheltered housing.

In housing terminology that pre-dates all the labels discussed above sheltered housing with a non-resident warden was and still is known as Category 1 sheltered and it sat in the void between general needs housing and definitively supported housing (which Cat 2 sheltered, ie resident warden and Cat 2.5 sheltered now called Extra Care definitely IS supported housing.)

In many cases the majority of the sheltered tenants received no support or care as the rationale of this type of sheltered housing was and is preventative and pro-active and to prolong quality of life and improve social isolation risks and to prevent the tenant having to go into costly and disempowering registered care provision.

Put very simple, in all forms of genuinely supported housing the tenant or resident needs to have a perceived support need as a condition of entry for example you need to be homeless to enter a hostel and need to have fled domestic violence to enter a refuge and need to have a mental health condition before being allowed into a mental health group home an so on.  Yet sheltered housing is only conditional on age, which while it can and does bring support need as some future date, it is not necessarily to have support need as a condition of tenure in sheltered housing.

So if the tenant is not RECEIVING care support and supervision then there is a strong argument that such a service is NOT supported housing but merely general needs housing.  If this holds the £39.64 per week figure illustrated here will NOT go into the cash limited pot to be redistributed it will simply be a cut in housing benefit as the LHA Maxima cap applies to general needs housing.

Now and given that Riverside, the social landlord here, has costed the support element at just £5.35 per week why would a local authority commissioner fund this with an additional £39.64 per week? Why would a commissioning decision be to pay £39.64 per week for a service the provider of that service costs at just £5.35 per week and they are already receiving from the tenant … who by definition is not ass vulnerable as other tenants or residents in genuine or other forms of supported housing and has clearly higher support needs?

Such a posit is wholly illogical and does not conform to the commissioning rationale, its theory and system that the LHA Maxima Cap for supported housing holds as central.

The financial risks to EXISTING sheltered housing with low or de minimis levels of support are there and de minimis is usually approximated to mean less than 2 hours per person per week when the support charge here equates to around 15 – 20 minutes of support per person per week!

Unfortunately, the LHA Maxima Cap consultation paper does not even touch on this issue never mind provide any form of clarification on it and so there is a huge potential financial risk to existing sheltered housing provision that absolutely has to be clarified before this consultation ends.

Yet this issue is being missed by those social housing professionals who provide these existing very low level sheltered housing schemes … probably the very same types who used to ask me over 20 years ago at any housing seminar, workshop or conference How many sheltered units you got when my name badge read Supported Housing Manager as they then and now wrongly equate sheltered housing with supported when they are very different and critically different terms….





10 thoughts on “Huge LHA Maxima Cap financial risk to EXISTING sheltered housing

  1. Precisely what a mess. I am now retired but could see this happening and getting worse from 2008 onward when supporting was commissioned and getting less each year forcing landlord/support to seek more ‘rent’ to cover support need. The ‘not on my budget’ struggle between the supporting people authority and housing benefit authority left the vulnerable tenant/client to suffer. We have to face the fact that an extra cost of supporting a client is not a housing cost.

    1. Generally agree with that though there are scores of very complex almost inexplainable issues within the general point about such tensions and undoubtedly the government believe providers have been transferring support costs into HB especially in sheltered housing and now are seeking to offload the problem to local council commissioners

  2. I am finding this information very useful. Up until 2 years ago I was a mental health worker in various roles. I now work in a homeless hostel, this one is men only. It is a charity I work for. We are pro-active with regards to each individual, helping them as their needs arise to gain independence and eventually move on into other acommodation. Most are complex individuals but dont actually ‘fit’ in a specific category and are classed as vulnerable because they are homeless (the ‘licence agreement’ is the only workable way to ensure safety etc). But then as they look for ‘tenancies’ they are low priority because they are not regarded above band ‘D’. So Bond Boards are used unless there is a debt. But we work hard and so do the people we help. There is now the big worry of single roomed accomodations for 25 year olds rising to 35 yrs. Bedsits or rooms with locks but communal kitchen etc.
    Some properties are very dire and landlords get away with wholly unsuitable and out right dangerous property.
    What a complete sham now.

    1. The job you do now is where I started my housing career some 24 years ago so can relate to what you are saying very well. The LHA Maxima policy fails to understand hostels as indeed do local council commissioners especially in terms of it being a staged resettlement process to include move on and the old adage if you cant move people out you cant move people in. The commissioning process will also de-prioritise hostel provision as it did in the SP model when it comes to the scarcity of funds and so many many more homeless hostels will close resulting in greater need and greater rough sleeping and the SAR that is coming into social housing will apply to all under 35 year olds making move on impossible … in short same old ill conceived ideological shit as policy that cannot possibly work even in theory and gives horrendous consequence!

      1. Wow really? The charity think something like ‘Supporting People’ will come into existence. I completed my first HB online for a new resident a few days ago and its changed especially the universal credit. There are so many ridiculous things that I feel each can easily lead into a loophole that denies people support. There are more homeless now as you know. It can happen to literally anyone. People come to me and say ‘everywheres full….there are no beds’ but as you say hostels are closing. Some churches allow the floors to be used and provide blankets etc. A different church each night takes on the duty.
        If our 2 hostels close ( 1 is emergency hostel and 1 is complete abstinant) then what will happen to them. I really do care……its why we do these kind of jobs.

      2. I advised over 200 providers in the Supporting People programme and the proposal is for a version of an SP Mark 2 type and dangerous because of it, extremely so for NIMBY services as hostels are seen.
        You are 100% right that it is a privilege to work in such environments and a caring altruism is why we do it …

      3. Not In My Back Yard (NIMBY) – a general term given to ‘client groups’ such as single homeless, ex offenders etc that the public is perceived to not want living in their area.
        Often in supported housing all vulnerable client groups all split into ‘undeserving’ such as NIMBY and ‘deserving’ ones such as older persons – who in terms of getting support funding are always at the front of the commissioning queue when hostels etc are always pushed to the back of that funding queue

  3. I see. How awful. In some ways I understand but we run a tight ship. However, there has been damage to the property from the idiots of the community. The community as a whole though is wonderful and we get lots of food donations.
    Thank you so much. I’ll be continuing to read your blogs.

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