Top tier councils are to get control of a ring-fenced grant to fund the delivery of supported housing services for short-term users, the government has announced.
Local authorities will have to work together, along with other public sector partners, in order to satisfy the government their spending plans are approriate.
This comes after the prime minister announced last week she will lift the local housing allowance cap for tenants in supported and social housing.
There is currently a complex funding system for supported housing with about £4.1bn of housing benefit meeting the ‘housing’ related costs, and a further £2bn coming from a variety of sources, including councils’ adult social care, housing, and homelessness funding, covering the ‘support’ element.
Ministers from the Department for Communities & Local Government, and the Department for Work & Pensions, are now consulting on a shake-up of the whole funding system.
One element of that proposes giving councils full control of a ring-fenced grant for short-term supported housing. This would be for for homeless people with support needs, people fleeing domestic abuse, people receiving support for drug and alcohol misuse, offenders and young people at risk.
DCLG’s and DWP’s policy statement said: “100% of this provision will be commissioned at a local level, funded locally through a ring-fenced grant, and underpinned by a new local planning and oversight regime.
“This means all the funding for housing costs (including rent and eligible service charges) that were previously met from housing benefit, will instead be allocated to local authorities to fund services that meet the needs of their local areas.
“This model will come in to effect from 2020.”
The document said doing this “removes short-term accommodation costs from the welfare system and provides local areas with more oversight and control over the provision in their areas”.
In return local authorities will have to produce a strategic plan setting out how the funding will be spent, and report “twice a year” on that. They will also have to undertake a needs assessment to identify current and future needs, and develop partnerships with other councils and other organisations.
“Given the need for cross-boundary co-operation and planning, in two-tier local authority areas DCLG plans to allocate the grant for short-term supported housing to the upper tier authority… This will be used to fund provision in agreement with districts in line with the strategic plan,” the document said.
It added government departments will ensure grant funding matches ”the sums that would otherwise have been paid out” to councils for housing costs through benefits. Allocations will be based on “current projections of future need” which will be “informed” through discussions with councils.
Meanwhile, the government is also consulting on the introduction of a ‘sheltered rent’, a type of social rent, which keeps funding for sheltered and extra care housing in the welfare system.
Colin Noble (Con), County Councils Network spokesman for health & social care, welcomed the announcement that he said would give “upper-tier local authorities a greater role in commissioning and overseeing short-term supported accommodation”.
“This is a recognition of [counties’] strategic role in local areas, in social care and wider service provision, allowing them to plan for the right supported homes and services in the right places, working in partnership with local health partners and district councils,” said Cllr Noble, who is also Suffolk CC leader.
Chair of the Local Government Association Lord Porter (Con) said councils “need the resources” to make sure vulnerable people are “protected and housed”, and added he looked forward to working with the government on the detailed funding proposals.