Housing providers struggle under impact of budget cuts

Supporting People now seems synonymous with cutbacks, bureaucracy
and controversy. But how can a funding programme which was so
welcomed by the housing sector just two years ago have fallen out
of favour so quickly?

Under Supporting People, local authorities commission services from
providers. The scheme was originally intended to bring greater
transparency to supported housing costs, which were previously
charged by providers to the housing benefit pot with little
regulation.

But optimism was shortlived with costs spiralling from an original
estimate of between £300m and £500m to an actual cost of
£1.8bn in 2003, when the scheme was launched. In response the
government last year announced a 7 per cent  cut in real terms over the next
three years.

Housing providers said the cuts would undermine services and cause
projects to close. Their fears appeared to have been realised last
week when provider Stonham announced up to 200 redundancies as part
of a reorganisation made in the wake of Supporting People
cuts.

More casualties are expected as the cuts begin to take hold but
some believe the sector as a whole has little reason to complain
about the amount of money put into the programme.

Jeremy Swain, chair of the pan-London providers group of
homelessness organisations, says all the members of the group are
going through the pain of funding cuts. But over the long-term they
have all benefited from the programme, he argues.

“We know that we have increased the level of support in our
projects and we all increased our turnover as a result of
Supporting People. We are now taking a cut on the back of a big
increase.

“But the voluntary sector felt obliged to play its
traditional role of whingeing ‘what a terrible
settlement’,” says Swain, who is also chief executive
of homelessness charity Thames Reach Bondway.

But for many agencies it is not just the cuts themselves but the
way local authorities are implementing them that is giving cause
for concern.

As with all council-controlled services, the quality and style of
delivery varies from one area to another, as does the way cuts are
implemented.

Andrew van Doorn, head of programmes at housing development agency
Hact, says some authorities have made their cuts in a crude,
across-the-board way, without any discussion with providers.
Projects are left in “limbo” because providers have no
meaningful dialogue with their commissioners and no certainty about
their future funding.

Van Doorn believes the Office of the Deputy Prime Minister should
have taken more responsibility for managing the programme itself,
particularly as it involved a fundamental shift to a
commissioner-led economy for a sector previously driven by
providers identifying work and making funding bids.

And local authorities were also given a new role in commissioning
services from a sector of which they had little experience, he
suggests.

Given such tumultuous change funding security was crucial but, van
Doorn argues, annual cuts and local variation in commissioning
meant that security never materialised.

The result is that projects do not feel confident enough to plan
ahead. The Housing Corporation recently announced a change to its
capital funding arrangements for supported housing because of a 50
per cent fall in applications.

Van Doorn says: “The sector has come a long way and it has
still got a long way to go. There is lots of uncertainty which
means small organisations cannot really plan that well. Supporting
People has not enabled the sector to think more in the medium to
long term and that is really regrettable.”

Large housing associations as well as small local groups have had
problems developing new services but local commissioning has
introduced additional concerns for the larger national
organisations.

Sheltered housing providers Anchor Trust, Housing 21 and Hanover
met in March to discuss the effects of Supporting People
bureaucracy on their services.

As national agencies they work with many local authorities, which
impose different demands on them. The chief executive of English
Churches Housing Group Peter Walter has complained of
“wheelbarrows full of paperwork” generated by different
local authorities, which were diverting resources away from
front-line services.

ut one person’s bureaucracy is another person’s
effective monitoring. According to Swain, the monitoring and
regulatory framework introduced under Supporting People has been
one of its great advantages.

He suggests that before the programme some agencies were getting
money under “false pretences” to deliver support they
were not providing. Services that have been decommissioned in many
cases did not deserve to receive the money, he believes.

“We have to be a little bit self-critical here and say this
has helped us to raise standards and the beneficiaries are service
users,” he says.

But Swain is concerned about other ways councils use their
commissioning powers.

He argues some London authorities have been
“price-fixing” by setting a price for a certain service
and tendering on that basis rather than on quality. As a result,
niche agencies may be squeezed out in favour of larger providers
who can benefit from efficiencies of scale.

There is also evidence that local authorities are beginning to
interpret their responsibility to commission “strategically
relevant” services as an excuse to limit provision to people
with a local connection.

The result, according to Swain, will be groups of street drinkers
and rough sleepers who “wash around the system”, not
staying in one place long enough to establish a local
connection.

According to Sarah Davis, policy officer at the Chartered Institute
of Housing, the principles behind Supporting People were excellent
but its development in an environment of continuous cuts has not
allowed it to stabilise.

Unfortunately, for those who crave a period of calm, further change
appears inevitable. Davis believes the housing sector must look
closely at the implications of the adult green paper, which
proposes individual budgets for people to commission their own
care.

“What isn’t fleshed out in the green paper is how this
might work in terms of housing support,” Davis says. She
thinks integrating the two agendas will be a challenge for housing
providers, particularly if the low-level warden support available
in sheltered housing has to be separated from housing costs, or if
tenants living in the same building are accessing support from
different providers.

Nigel Rogers, director of supported housing resource agency Sitra,
believes it would be difficult to integrate the green paper with
Supporting People because of the nature of some of the groups the
programme supports.

People with drug, alcohol or homelessness problems are more likely
to have emergency, short-term needs and may be more difficult to
engage in terms of commissioning their own care, he
adds.

But van Doorn believes there is no reason why Supporting People
cannot exist as part of the personalised-budget agenda, and says
professionals’ defence of separate budgets reveals a
“silo mentality”.

Indeed, it appears as if professionals will have to get used to
Supporting People funding existing within a more general pot, with
the revelation that the programme is likely to lose its ring-fenced
status at some point after April 2006.

he news of the demise of the ring-fenced funds was inevitably
greeted with warnings that unpopular groups would lose out and
local authorities would shift the focus on those to whom they had a
statutory responsibility.

But van Doorn believes there will be advantages to bringing
supported housing funding into the mainstream.

Sustaining people in their tenancies could be framed as part of a
wider function of supporting people within their community,
especially as many social services departments now
encompass

areas such as leisure and health, he argues.

“What is important is that supported housing is not isolated
from all the other things that sustain people’s lives,”
he says.

Added to these long-term concerns is the consultation expected soon
on the redistribution formula for Supporting People funding, which
will decide how the allocation each local authority receives will
change in the future.

Despite the problems, there is still great faith in Supporting
People. “I’m still a fan,” says Rogers.
“But what we are now getting is change happening at a pace
that I’m not sure the sector can fully
sustain.”