Supported Housing Funding – The Next Steps

Posted: 6th November 2017

The Government published its long-awaited proposals on the future funding of supported housing at the end of last month.

There will be three different approaches from April 2020 depending on the type of supported housing involved:

  • Sheltered and extra care housing – housing designated for occupation mainly by over-55s with care and support needs, with most being of state pension age. A ‘sheltered rent’ will be introduced as a particular form of social rent, with gross eligible rents charged by registered providers, and  annual caps on rent increases set & regulated by the social housing regulator. Current proposals are to base sheltered rents on the combination of a formula rent, plus or minus 10%,  for supported housing and eligible service charges, up to a particular capped level. Existing schemes will be brought into the system at their existing gross rent levels, but new schemes will be subject to the cap.
  • Short-term supported housing – where there is up  to two years’ length of stay, accessed following a crisis or as part of a transition to living independently. All costs previously met through Housing Benefit (HB) will be transferred to English local authorities to administer as a ring-fenced grant under Section 31 of the Local Government Act. In Scotland and Wales, equivalent funding will be provided for the devolved administrations to decide on allocation. In two-tier authorities, grants will be paid to the upper tier and then put to use in agreement with district councils.  Individual residents’ entitlement for help with their housing costs through HB or Universal Credit will remain unchanged, although they will no longer pay rent, as such.
  • Long-term supported housing – housing for people with long-term support needs where there is little expectation of transition to unsupported accommodation. Taking into account the Government’s earlier decision not to apply Local Housing Allowance rates to social housing, no changes are proposed for this type of supported housing. Rents and eligible service costs will continue to be funded through the welfare system, subject to the application of HB or Universal Credit rules.

The Government’s aims are that the changes should:

  • give funding security to providers, enabling them to make long-term investment decisions and secure future supply
  • ensure value for money for taxpayers
  • strengthen the role of local authorities
  • support better outcomes for residents.

A National Statement of Expectation is proposed as a framework for improving strategic planning and commissioning of supported housing in England. Local authorities will be expected to assess the needs of vulnerable people in their areas, both now and in the future. They should plan to meet them and ensure fair access. In two-tier areas, upper tier authorities would convene the plan, but work collaboratively with lower tier authorities and local partners in their area. Local authorities would also be responsible for ensuring decent standards of service delivery, considering both the support and housing elements, including accommodation.  In the case of short-term supported housing they should ensure the availability of move-on housing. They would be required to report annually on delivery, with six-monthly reporting on grant fund spend.

The announcements have so far met with a mixed response.

The National Housing Federation has broadly welcomed the proposals, but providers of short-term supported housing remain suspicious that the proposed ring-fenced grant will eventually be absorbed by cash-strapped local authorities. This could be put to other uses, as occurred with Supporting People funding. There are also concerns that funding protection in general would only last until 2019/20, as it remains the Government’s policy to reduce spend on housing welfare in the sector by some £500m in 2020/21.

The proposals on ‘sheltered rent’ and the funding model for short-term supported housing are now out for consultation until 23 January 2018. Interested parties should aim to make their views on the proposals known to the Government by then. Further, more detailed, consultation planned for early next year linked to ‘sheltered rent’ is planned for early next year as part of the development of a new rent standard.

Providers should consider whether the proposals really will deliver the security which they and the Government want to be brought to the sector, enabling growth.

Many questions still remain unanswered:-

  • Will the proposals on the basis of ‘sheltered rent’ for new schemes prove sufficient to meet scheme costs?
  • How should the basis for rent increase caps on sheltered and extra care housing be developed, particularly bearing in mind service charges?
  • On short-term supported housing, are there further measures that could be put in place (e.g. specific legislation) that could safeguard the ring-fenced grant?
  • How can residents’ rights be assured in housing where no rent is payable?
  • More generally, what are the implications of continuing Government concerns about achieving value for money in a sector that has already had more scrutiny over its costs than any other form of housing provision?

Finally, looking at the proposals from the point of view of English local authorities:-

  • Would guidance on the production of needs assessments and Supported Housing Strategic Plans be welcomed?
  • What are the resource implications of an approach that envisages further grant administration?
  • How will they handled on-going collaboration, data gathering and performance monitoring?
  • Do the proposals give sufficient confidence that authorities will be able to address future growth needs?

There are clearly more answers still needed to give providers certainty on the future settlement.


If you need any help on Supported Housing Funding please contact Tristan at

For any other areas of housing please email or call 0207 934 0175

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