Last week the Department for Work and Pensions (DWP) indicated that it was postponing the cap on charges in supported housing schemes that was announced in the Autumn Statement.
While this is to be welcomed, it is frustrating that the DWP did not think through these changes before they were announced. As a result, the confidence of housing associations has been dented, and a number of schemes have not been developed because of uncertainty regarding revenue funding.
As for back as December last year, and subsequently on Channel 4 News in January, I warned of the dire consequences of capping charges in supported housing schemes at local housing allowance levels from 2018. BHT’s forecasts showed that many of our schemes would become unaffordable, not least for anyone under the age of 35, and we would have to close some schemes.
On the assumption that any shortfall in rent of £10 per week or more would be unaffordable to tenants on benefits to make up:
- 435 (69.8%) of BHT’s 623 homes / lettings would be unaffordable for those under 35 and
- 273 (43.8%) would be unaffordable for those over 35.
The proposed cap still applies to our general needs and private sector leased accommodation. See here for more details.
The long-term solution that the DWP now needs to come up with must be sustainable in the long term, so that essential services for vulnerable people can remain financially viable.
The cost to local authorities, the NHS and other government departments would be astronomical if under 35s and others were priced out of supported housing schemes, or these schemes were to close.
Is it too much to ask of government that they think and consult before announcing such measures? This fiasco has damaged the sector, and has undermined confidence in the DWP and government in its ability to make reasonable judgements and decisions.