It has been almost a year since then-chancellor George Osborne announced a cap on social housing benefits yet, according to St Mungo’s chief executive Howard Sinclair, it remains “the biggest threat to supported housing in the 30 years [he has] worked in the sector”.
In its 2015 autumn statement, the government announced that from 2018, it would bring housing benefit for social tenants in line with the local rates for those renting privately. Osborne said this would prevent social landlords charging inflated rents, but the National Housing Federation (NHF) estimated that it could force the closure of up to 82,000 housing units (40% of the schemes in England).
Many social housing professionals warned that the cap would force vulnerable supported housing tenants back into residential and NHS care, costing the taxpayer hundreds of millions of pounds.
The government has now announced it is deferring the imposition of a cap on supported housing for two years, to 2019/20, when a new funding formula will be introduced.
But social housing providers remain anxious, particularly because they are still subject to a 1% cut in social rents. Angela Lockwood, chief executive of North Star housing group, which provides 20% of its housing stock for people with support needs, says her organisation is stuck. She says many planned building projects may end up being cancelled, because, “despite unmet needs, we couldn’t possibly develop schemes with this uncertainty”. The victims, she points out, will be vulnerable people.
Sinclair shares Lockwood’s concern. The uncertainty may have affected St Mungo’s less than some mainstream housing associations, but Sinclair says the homeless charity will have £3m a year less to spend on services. This could necessitate the closure hostels and force people back onto the streets. “The organisation isn’t at risk,” says Sinclair. “What is at risk is the lives of people.”
Yet amid the pressure, the sector is being proactive. A coalition of 15 disability charities has written an open letter to the government, condemning the uncertainty. There is also a petition calling for the government to ensure those who live in supported housing are exempt from the local housing allowance cap, while the NHF has begun a campaign, Starts at Home, to raise awareness of the vital work of housing associations to meet the needs of their tenants.
