Budget cuts deflate enthusiasm for new supported housing scheme

When the grant allocation for the government’s Supporting People
programme was announced last month, at first it appeared to be a
cause for celebration (news, page 11, 27 February).

The total £1.4bn allocated far exceeded even the more
ambitious estimates. But it soon became clear that all was not
quite as it seemed.

Despite government guarantees that the funding for this new system
of providing housing for vulnerable members of society would be met
in full, English councils have found themselves being asked to make
“savings adjustments” to their budgets of 2 to 3 per cent.

What is more, many “pipeline” schemes – building projects accounted
for in local authorities’ Supported People budgets that have not
yet been started – appear to have received virtually no funding at
all.

The result has left housing officers scrabbling around for extra
funds just to ensure their new Supporting People schemes see the
light of day.

In Somerset, the enthusiasm that greeted a grant of £17m has
been tempered somewhat by the requirement to make savings of
£400,000 on their budget estimates.

“It’s too early to say whether any schemes will be put at risk,”
says Mark Beard, Somerset’s Supporting People partnership manager.
But with many long-term contracts already signed, there are
unlikely to be many opportunities to save the money without cutting
something.

“We are now looking at what is possible, but the opportunities for
savings are limited because these schemes were budgeted on the
assumption that all the funds would be available.”

Beard regards the last-minute arrival of savings adjustments as an
unfortunate postscript to what has been up to now a model example
of how local authorities should deal with government.

“Up until now it has been a very positive programme,” he says. “The
Office of the Deputy Prime Minister has delivered everything it
said it would. So it’s a real shame that it has been spoilt by this
last minute penny pinching.”

For David Munro, executive director of adult services and community
care at Surrey Council, the savings adjustment combined with
inadequate pipeline funding and the use of an allocation formula
that “severely disadvantages the South East” means he will be
trying to find an estimated extra £600,000 to fully fund the
council’s Supporting People programme. He says it is unlikely that
all the proposed Supporting People schemes will make it through
this process.

“We are going to have to make some very unpleasant decisions. To
start with, it looks as if we might not be able to fund a scheme
providing supported housing for victims of domestic violence which
would be a great shame because there is a need for that service in
Surrey.”

Munro dismisses the notion that the extra money could be found
through savings. “We will make savings, of course we will. But we
run a pretty tight ship already and it’s pie in the sky to think
you can make those sort of savings in the first year.”

At East Sussex Council, a grant of £10.7m has been somewhat
grudgingly accepted by lead cabinet member for social services and
health, Keith Glazier. “We cautiously welcome this announcement. It
will enable the council to continue to provide support to some
10,000 residents in East Sussex to assist them in their own homes,”
he says.

But he adds: “I am concerned that the funding does not allow for
any real growth in these services, which are much needed in the
county.”

So what of the government’s much-trumpeted promise to ensure that
the legacy funding on which the local authorities have been basing
their budget estimations will be met in full?

The funding is being transferred from a variety of sources
including elements of transitional housing benefit, the supported
housing management grant, probation accommodation grant, income
support and jobseekers allowance.

According to a spokesperson for the ODPM, that promise remains
good. “This is not about making cuts [to the legacy spending]. This
is a huge amount of money after all. The process will involve
improvements in cost efficiency and the local authorities will have
the flexibility to make savings because of that.” Funding for the
pipeline schemes will also become available as the programme
progresses, the ODPM promises.

“They have got funding for all the schemes up and running by April.
Funding for the rest will come on stream in the second and third
year.”

But according to independent Supporting People consultant Neil
Miller, failure to fully fund the first year of Supporting People
could risk the credibility of a scheme that has been heralded as
the biggest transfer of money from central to local government
since community care was introduced.

Schemes put at risk could include projects to reduce crises such as
hospitalisation, institutional care, and homelessness by providing
early support when it is most effective.

“My view is that this is a broken promise which shows bad faith on
the part of ministers,” he says. “It will cause long-term damage
both to the credibility and to the aims of the programme.
Administering authorities will be left with no alternative but to
cut some grants.”

However, there are many within the housing sector who feel that the
local authorities, rather than quibbling over the details, should
be grateful for what they have.

“I see £1.4bn as big money so this is very good news for the
sector,” says Supporting People consultant Kathleen Boyle. “It’s
much more than we expected so I think we should be happy with that.
Yes, some authorities will have to make savings but I don’t think
that should be a major problem”

Local authorities’ contractors also seem happy with the amount of
money allocated. “This level of funding exceeds our earlier
expectations and is welcome news,” says Diane Henderson, head of
care, support and diversity at the National Housing Federation.
“Our members deserve credit for their important role in identifying
schemes and needs that were previously overlooked by official
estimates but have been subsequently included.”

Nevertheless, Henderson is concerned that the allocation has been
made too late for many local authorities and their providers to
agree their contracts and pricing schedules before the 1 April
deadline.

“We have members who have not signed their contracts yet and others
who haven’t even seen a contract,” she says. “With only five weeks
to go before implementation it is a serious concern that many local
authorities and providers have not agreed contracts and pricing
schedules. These administrative delays could disrupt service
delivery on the ground. The ODPM needs to ensure that local
authorities are doing their utmost to finalise arrangements prior
to implementation.”

The ODPM admits that the final deadline is a little tight. However
it points out that local authorities and their contractors have had
three years’ notice to get their arrangements sorted out.

Henderson’s biggest fear is that last minute contract wrangles
could results in delays in payments once the Supporting People
schemes are up and running. Having suffered a succession of delays
in receiving housing benefit under the old system, she is loath to
see Supporting People go the same way.

“Nobody is going to go bust on 2 April because of this. But if the
delays extend into May then some of our members will have some
serious cashflow problems. We would not want Supporting People to
go the same way as housing benefit.”

Supporting People

The programme, set to come in on 1 April, marks a radical shake-up
in the way government finances supported housing in England, Wales
and Northern Ireland.

The scheme aims to enable vulnerable people to live in their own
homes for longer periods by providing them with proper support. For
the first time, local authorities in England will have the
responsibility of funding all the supported housing costs in their
area through one single pot of resources.

The Supporting People grant is based on a transfer of funding from
a number of existing revenues including transitional housing
benefit, supported housing management grant, probation
accommodation grant, income support and jobseekers allowance.

The programme is being implemented in England by the Office of the
Deputy Prime Minister through local authorities, by the Welsh
assembly in Wales and by the housing executive in Northern
Ireland.