Ministers have conceded a ring-fenced fund to take supported housing out of the local housing allowance cap system.
In a parliamentary statement, work and pensions secretary Damian Green said he would defer application of the allowance cap to supported housing until 2019-20, when “we will bring in a new funding model which will ensure that the sector continues to be funded at current levels”.
For rents above the cap the government would devolve funding in England to councils to ‘top up’ funding to supported housing providers with higher costs.
“In recognition of the need to manage the transition to a new funding regime carefully, we will ring-fence the top-up fund to ensure it continues to support vulnerable people,” Mr Green said. Equivalent amounts would be allocated to the Welsh and Scottish governments.
LGA chair Lord Porter (Con) said the association normally opposed ringfencing but “we understand the government’s reasoning in this exceptional case, and feel that the prize here is very much worth that price”.
He added: “Applying the cap would have hit some of our most vulnerable residents and jeopardised many of the supported housing schemes that were due to be developed.
“There was genuine fear that some homes would not be built, while others would be forced to close.”
The LGA argued that the proposed cap on benefit paid to support rents in each area would not have covered the extra costs to supported housing providers of specialist equipment and adaptations.
Lord Porter said: “The LGA will continue to work with government to ensure these changes are implemented in a way that gives providers the certainty they need to invest in supported housing so that we can carry on meeting the needs of vulnerable people, and that they can live in homes that are fit for purpose.”