Could supported housing survive a 68% loss of income?

Wednesday, 24 February 2016 - 9:05am

Following the Government's announcement in the Spending Review that social rents would be capped at Local Housing Allowance (LHA) levels from 2018, there has been widespread concern about what this will mean for the availability of accommodation for people experiencing homelessness and other vulnerabilities. If the caps come in, how will supported housing services survive such severe reductions to their rental income, and keep their doors open to the thousands of people who live in them?

Over the past few weeks more and more voices have added their concerns to this issue. There were dire warnings about the impact on women fleeing domestic violence, as well as people recovering from mental health conditions living in the community and elderly people living sheltered accommodation. It is important these sectors get across just how many vulnerable people could be hit by these changes. Aside from the very real difference we know these services make to people's lives, supported housing also saves money and helps the Government meet their aims of reducing delayed discharge from hospital, promoting independence and reducing the need for acute care. Forcing through changes which threaten to shut them makes no sense.

Since our call out for evidence earlier this month, Homeless Link members have shared data about what would happen if their rental income was reduced to LHA levels. Based on feedback from 45 services providing around 8,000 bed spaces, the projected loss of income came in at an average of 68%, representing an estimated loss of over £39m for these services alone*. Taking into account all the other types of accommodation which would be affected by the caps, the scale of the impact cannot be over-estimated. Many of our members have already told us they will be forced to close. Many are already being forced to withdraw from planned developments and capital projects as they face too much uncertainty over future revenue. 2018 might seem some way off, but this proposal is already having an impact and reducing our ability to tackle homelessness.

Homeless Link, together with Sitra, will continue to challenge these proposals and make sure the risks they present are heard and understood across Government. As well as working with the Department for Work and Pensions and the Department for Communities and Local Government, we have met officials in the Home Office, Department of Health and Public Health England, to flag the implications this will have on their priorities for a range of vulnerable groups, including ex-offenders and those in recovery from drug or alcohol use. We are also sharing the early findings you've helped us produce with the Treasury to stress the scale of the impact and long term costs to the public purse.

It's not too late to share evidence so please complete this spreadsheet and return it to us, together with feedback about if, and how, it is affecting your service. We've also prepared a briefing to assist with local lobbying you might be doing.

On Thursday, the national rough sleeping statistics will be published, and if these reflect other indications of rising demand, we expect yet another increase of numbers of people experiencing homelessness.

Let this be a wakeup call to show what will happen if the proposals to cap social rent are not reconsidered. Existing provision is already struggling to meet demand: if any more of the 36,000 bed spaces we have which offer accommodation to those at risk are lost, where else will people facing homelessness turn?

If you want to get in touch about the changes please visit our campaign page for updates and join our Policy network.

* - projected losses are calculated against the application of LHA at the Shared Accommodation Rate.

Capping of social housing rents - what impact will it have on your service?

Download and complete this simple spreadsheet to calculate the likely impact of proposed changes to your service.


Capping of social housing rents and the impact on supported accommodation

An introduction to supported accommodation, who it benefits, how it is funded, and the impact the proposed capping of social housing rents will have on current services.


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Helen Mathie

Helen Mathie

Head of policy and communications

Helen oversees Homeless Link’s policy, research, information and communications teams. Helen is currently on maternity leave.

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