Research and analysis

Supported Housing Review 2023: Executive summary

Published 4 November 2024

Applies to England, Scotland and Wales

Authors: Christina Beatty, Emma Bimpson, Jan Gilbertson, Lindsey McCarthy, Elizabeth Sanderson, and Ian Wilson

Centre for Regional Economic and Social Research
Sheffield Hallam University

November 2024

The findings and recommendations in this report are those of the authors and do not necessarily represent the views of the Ministry of Housing, Communities and Local Government or the Department for Work and Pensions

Foreword

This report presents the results of a large-scale study of the Supported Housing Sector, which aims to understand the demographics, size and scope of the sector and the forecasts for demand and supply of accommodation. It provides a much needed update to the previous study undertaken by Ipsos Mori and Imogen Blood Associates in 2016.

In the previous Parliament, the Select Committee Report noted some of the problems in the sector and the department is committed to driving improvements to address these issues through measures such as the Supported Housing Improvement Programme and the Supported Housing Regulatory Oversight Act.

This study, together with the evaluation of the Supported Housing Improvement programme, aims to improve our understanding of the working of the sector, and inform future policy and funding decisions.

The study comprises a number of linked research strands, including reviews of the existing literature and administrative data sources, large scale primary surveys with supported housing commissioners, local authority Housing Benefit teams, and providers of supported housing, together with a number of in-depth case studies. The next phase of research on supported housing focuses on the economic benefits and costs of the sector, and a scoping study is under way at the time of writing (Spring 2024).

I would like to thank colleagues from the Centre for Regional Economic and Social Research (CRESR) at Sheffield Hallam University and their partners for their continued hard work conducting research and synthesising the evidence for this report. Particular thanks should go to the authors: Christina Beatty, Ian Wilson, Emma Bimpson, Jan Gilbertson, Lindsey McCarthy, and Elizabeth Sanderson.

My thanks also go to the Department for Work and Pensions for funding the extension of the study to include coverage of Scotland and Wales in the study.

I would also like to acknowledge the support from wider membership organisations and networks who supported engagement activities with their members including encouraging them to take part in the research. This included contributions from the National Housing Federation, Homeless Link, Cymorth Cymru, Coalition of Care and Support Providers in Scotland, Scottish Federation of Housing Associations, The Benefits Directory, Institute of Revenues Rating and Valuation, NHS Confederation’s Mental Health and Housing Forum, and the Learning Disability and Autism Housing Network.  

Above all, my sincerest thanks go to the hundreds of people across local authorities, County Councils, Housing Benefit and Revenue teams, commissioning teams, NHS and Integrated Care Boards, and supported housing providers who all gave their time to take part in the research. This included all those who undertook in-depth interviews, supported the case studies or participated in one of the surveys. Without this input the research would not have been possible.  

Thanks are also due to a number of colleagues who provided valuable support in various stages of the study, including Beth Speake, Dave Leather, Rebecca Hamer, and Jessica Nsana at CRESR, who all made important contributions to the fieldwork, case studies, survey development and implementation, and Ed Ferrari, Gail Hallewell, Rosie Smith, Emerald Tofte and Sarah Ward from the wider research team.

Special thanks are also due to all those in the Ministry of Housing, Communities and Local Government and the Department for Work and Pensions who helped guide, inform and support this research: Yajna Boolaky, Graham Kinshott, Richard Loftman, Darrell Smith and Rachel Worledge at the Ministry of Housing, Communities and Local Government; Ruth Buckle, Josie Feltham, Ashley Kershaw, Pontus Ljungberg, Simon Lunn, Marie Savage and Richard Ward at the Department for Work and Pensions; Holly Dunning and Jackson Sin at the Department of Health and Social Care; and Sara James at the Welsh Government.

In addition, the authors would like to thank the members of the Advisory Group who provided invaluable insights to inform the development of the research instruments and research design. This included Sue Ramsden from the National Housing Federation, Katie Dalton from Cymorth Cymru, Yvette Burgess from Coalition of Care and Support Providers in Scotland, Eileen McMullan from the Scottish Federation of Housing Associations, and Ian Copeman from the Housing Learning and Improvement Network, and the Regulator of Social Housing.

Stephen Aldridge
Director for Analysis and Data, and Chief Economist
Ministry of Housing, Communities and Local Government

Executive summary

Introduction

1. The government is committed to ensuring a sustainable supported housing sector which enables vulnerable people and those with disabilities to live as independently as possible within the community. The aim of the sector is to improve health, wellbeing and socio-economic outcomes for people who need support to live independently in the community. The government also needs to ensure the system delivers value for money.  This study aims to provide a robust and up-to-date evidence base which will enable effective policy development for supported housing.

2. A wide range of quantitative and qualitative data has been collected throughout this study to provide insights on various aspects of supported housing in Britain. This has confirmed the complexity of the sector in terms of client needs, provider types, delivery models, commissioning practices, and funding mechanisms. These factors interact with each other to different extents across localities. This results in a fragmented system which is funded and delivered in different ways to varying degrees depending on where you live. This leads to uneven rates of provision and access to services dependant on local context.

3. No single data source provides a complete picture of the sector. Analysis of the existing secondary and administrative data sources, primary surveys and qualitative research shows that each source provides data on partial aspects of the sector. These reflect each stakeholder’s perspective from the part of the sector they operate within.

4. Housing Benefit teams tend to primarily be concerned with or have data on Housing Benefit claimants who live within the third of all supported housing that falls within Specified Accommodation regulations. Many Housing Benefit teams have limited data on supported housing in their area that falls outside Specified Accommodation rules.

5. Local authority commissioners tend to mainly have data on the provision that they directly fund commissioned services for. Their knowledge is often client group specific rather than across supported housing provision as a whole. Funding tends to be focused on those in highest need. Many commissioners have limited data on non-commissioned supported housing provision in their area. This means local authority commissioners and Housing Benefit teams can provide insights on the parts of the sector they deal with, but not necessarily provision as a whole. There are parts of supported housing, for example some sheltered housing for older people, which will neither be directly funded as commissioned services or fall within the Specified Accommodation rules (as Housing Benefit entitlement is assessed according to individual need). Local authorities are unable to systematically provide data on this type of provision.

6. Providers have more comprehensive data on their stock and tenants, but regulatory systems for capturing this data only focus on registered providers. Some providers have a good overview of the whole system across client groups or places. But for other providers, their knowledge is firmly grounded in particular client groups or places depending on the size of their organisation or specialism.

Policy overview

7. Multiple and interchangeable definitions of what constitutes supported housing are used by national governments, local authorities, regulatory bodies, umbrella organisations and providers. Broadly, these fall within an overarching concept of supported housing being:

accommodation which is provided alongside care, support or supervision to help people with specific needs to live as independently as possible in the community

8. National policy frameworks for the delivery of supported housing in England, Scotland and Wales are complex. The funding regimes differ by nation as do the regulatory frameworks. There is a wide variety of supported housing providers operating in the sector delivering a range of service models across different client types.

9. Housing Benefit policy, legislation and regulations are the responsibility of the Department for Work and Pensions. Unlike housing policy, which is a devolved matter, Housing Benefit is a reserved matter and the same rules and regulations apply across England, Scotland and Wales. Housing Benefit provides financial support towards the cost of the accommodation element of supported housing. Entitlement is assessed on an individual level. However, Housing Benefit cannot be used to cover the costs of care, support or supervision as these are ineligible service charges under Housing Benefit regulations.

10. There is no legal or unambiguous definition of the level of care, support or supervision within Housing Benefit regulations nor is there a definition in the regulations as to what constitutes care, support or supervision. Case law for Housing Benefit has established that the terms take on their ordinary meanings but that the level needs to be ‘more than minimal’. This leads to various interpretations of ‘more than minimal’ such as care, support or supervision being sufficient to make a real difference to a person’s ability to continue to live in the property. However, the subjectivity and inconsistency in how the definition of what constitutes a minimal amount of care, support or supervision is interpreted makes measurement of the sector difficult.

11. Housing Benefit regulations are complex and vary by different types of supported housing. This includes a four-fold Specified Accommodation classification: Exempt Accommodation, Managed Properties, Refuges, and Local Authority Hostels. The criteria for each Specified Accommodation category are determined by the type of landlord; whether care, support or supervision is being provided; and if so by whom. The categories also determine how eligible rent and service charges are assessed. Housing Benefit is based on an individual’s entitlement and much of sheltered housing falls outside of Specified Accommodation rules. This is due to the level of individual need of most of the residents in that housing and types of landlords. A minority of residents in sheltered housing for older people will qualify for Housing Benefit under Specified Accommodation rules. Housing Benefit claims from residents of accommodation which does not qualify as Specified Accommodation are categorised as general needs claims for Housing Benefit purposes.

12. Housing Benefit regulations also determine how much subsidy can be reclaimed by the local authority from the Department for Work and Pensions to cover their Housing Benefit costs. The subsidy rules are set out in the Income-related Benefits (Subsidy to Authorities) Order 1988. Local authorities are not reimbursed in full for the cost of all the Housing Benefit awards made in respect of Specified Accommodation as the amount they receive will depend on the type of provider and the eligible rent rules which apply. This can result in subsidy loss for individual local authorities depending on the composition of provision in their area.

Research objectives

13. This study aims to provide an up-to-date understanding of the supported housing sector in England, Scotland and Wales in 2023. Specifically, the project aims to address 6 overarching research questions:

• What is the size and composition of the supported housing sector? How much provision is there, for which service types, and for which client groups?
• Which issues impact on the supply and demand for supported housing? To what extent does the supply of commissioned or non-commissioned supported housing services meet existing demand from client groups and what are the perceived barriers to developing additional supply?
• How is the demand for supported housing likely to change in the future? How much supported housing might be needed in the future given current supply, demand, unmet demand and changing population demographics?
• What are the costs of provision? What is known about average rents, service charges and funding from local authorities for commissioned housing support services and how do these vary by client group?
• How do commissioning practices vary across local authorities? What works or does not work well in current commissioning practices, how have they changed over time, and to what extent does partnership working exist between local commissioners, Housing Benefit teams and supported housing providers?
• How can monitoring of the sector be improved? Given the varied definitions used within the sector and lack of systematic data providing a complete overview of the entire sector, how might future monitoring data be enhanced to improve understanding of the sector?

Research design

14. This study takes a mixed method approach which enabled the collection of the breadth and depth of data required to address each of these research questions. A range of primary, secondary, quantitative and qualitative data sources have been analysed to allow triangulation across all the evidence collected. The study included 4 key research strands. More detail on the technical aspects of research design, including survey design and response rates, is included in Appendix A1.

15. The first strand of the research included a series of scoping interviews and engagement exercises with a wide range of stakeholders and organisations across England, Scotland and Wales. A literature review and data review were conducted as part of the exercise. This informed the research design, maximised engagement and participation in the research, and supported the implementation of the research.

16. The second strand of the research assessed and analysed a range of secondary and administrative data sources on various aspects of supported housing in Great Britain. This included official regulatory and government statistics on stock and rents; the Department for Work and Pensions’ Single Housing Benefit Extract on claims within Specified Accommodation; and the Continuous Recording of Lettings in Social Housing (CORE) on the characteristics of all new supported housing lettings in England.

17. The third strand included 3 primary surveys capturing 3 different stakeholder perspectives: a Local Authority Housing Benefit Team Survey (173 respondents); a Local Authority and County Council Commissioner Survey (79 respondents); and a Supported Housing Provider Survey (189 respondents). The 3 surveys included questions about stock, rents, service charges, demand for services, unmet need and commissioning practices.

18. The fourth strand of the research included a series of 16 in-depth case studies which included interviews with 135 stakeholders in local authorities, wider statutory bodies and a range of supported housing provider organisations. Most of the interviews were within and between organisations in particular localities or with providers and commissioners delivering supported housing for particular client groups.

An overview of key findings

19. This study aims to provide an up-to-date understanding of the supported housing sector in England, Scotland and Wales in 2023. The study includes supported housing which provides accommodation that is designed or designated to come with care, support or supervision which helps people who are vulnerable, socially disadvantaged or have disabilities to live as independently as possible in the community. The remit of the study does not include floating support or residential care homes.

20. The breadth of evidence collected confirms the complexity and diversity of the sector. Policy frameworks and regulatory systems vary considerably across the 3 nations. Supported housing is provided by a wide variety of landlords, delivery models and funding mechanisms. The sector delivers accommodation with care, support or supervision for a wide range of client groups with varied needs both between and within client groups. Often, residents in supported housing can have multiple and complex needs that means they have support needs that fall within more than one client group.

21. Generally, primary client groups within short-term and transitional provision includes: people experiencing homelessness; young people; people at risk of domestic abuse; people with drug or alcohol issues; prison leavers; refugees and asylum seekers; and veterans. Long-term supported housing provision for working age people with disabilities includes 3 main client groups: people with mental health problems; people with learning disabilities and autistic people; and people with physical disabilities or sensory impairments. Housing for older people with support needs forms the remainder of supported housing provision. This can range from sheltered housing, providing relatively limited levels of support, to extra care provision for people requiring high levels of support to remain living as independently as possible in the community.

22. Provision of supported housing contributes to the health, wellbeing and socio-economic outcomes of those living in the sector. It supports people to transition to more independent living and enables some people to live within the community rather than in institutional care. This project aims to address 6 overarching research questions and the key evidence for each is summarised below.

What is the size and composition of the supported housing sector?

23. This study has been conducted using a different methodology than that used for the 2016 Supported Accommodation Review (Department for Work and Pensions and Department for Communities and Local Government, 2016). The policy context and data recorded within secondary and administrative data sources have also changed over time. This means that the data presented in this report, which uses regulatory statistics combined with survey methods to estimate the size of the sector, are not directly comparable to estimates produced as part of the prior study which relied on a population weighted survey of local authority commissioners to derive estimates of the size of the sector. The data does not, therefore, represent a consistent time series. It is strongly advised that direct comparison of stock levels as a whole or by client group, as well as other data, between the two studies is not made. Instead, each study should be seen as a snapshot of the best available data at each point of time. That said, there is a great deal of consistency in distributional patterns observed within the 2016 study and the 2023 study both between and within nations, as well as between client groups.

24. This study estimates there are 634,000 units of supported housing in Great Britain. Of these:

• 535,400 units are in England (84%), 57,500 are in Scotland (9%), and 41,100 units are in Wales (6%)
• 423,100 units are for older people’s housing (67%), 126,500 units are for short-term or transitional accommodation (20%), and 84,300 units are for long-term supported housing for working age people with disabilities (13%)
• supported housing for people with a learning disability and autistic people (9% of all units) and single people experiencing homelessness (9% of all units) are the two largest working age client groups

25. Specified Accommodation is a four-fold classification of supported housing for Housing Benefit assessment purposes (Exempt Accommodation, Managed Properties, Refuges, and Local Authority Hostels), but not all supported housing falls within these rules as Housing Benefit entitlement is based on the individual needs of claimants. There are some types of supported housing where the majority of provision is classed as general needs for Housing Benefit purposes such as older people’s sheltered housing.

26. Specified Accommodation in Great Britain in November 2023, from data provided by the Department for Work and Pensions from the Single Housing Benefit Extract (SHBE) on all Housing Benefit claims recorded as being within Specified Accommodation regulations, indicates:

• the current exercise being undertaken by local authorities to identify and record all Specified Accommodation on Housing Benefit records has improved consistency of recorded data, enhanced data quality, and reduced the level of under-recording of Specified Accommodation claims
• there will still be an element of under-recording of Specified Accommodation within SHBE data for November 2023 as the data improvement exercise will not be complete until April 2024
• there were 215,770 Specified Accommodation claims recorded on the Housing Benefit system in November 2023 - this is equivalent to 34% all supported housing
• 78% of all Specified Accommodation Housing Benefit claims are working age claimants and 22% are pensionable age claimants
• 83% of all Specified Accommodation claims are for Exempt Accommodation; the Housing Benefit Team Survey indicates that the remaining 17% of Specified Accommodation claims comprises of: 13% Managed Properties, 3% Local Authority hostels, and 1% Refuges

27. Approximately 38% of all supported housing is commissioned and funded by local authorities or statutory bodies to cover some, or all, of the costs of providing care, support or supervision as part of a supported housing service. Funding for commissioned services varies by client group:

• just over 80% of provision for single people experiencing homelessness and for people with drug and alcohol problems receive some local authority funding
• over 90% of most other working age client groups receive some local authority funding
• only 28% of supported housing specifically for veterans receives any funding from local authorities
• only 16% of supported housing designed or designated for older people receives some local authority funding for providing supported housing services – this is primarily focused on extra care provision

Which issues impact on the supply and demand for supported housing?

28. There are significant long-term challenges in sustaining the current supply of supported housing as well as numerous barriers in developing new provision. For many local authorities long-term funding constraints and budgetary pressures mean that there are limited resources available to fund commissioned services. In some local authorities certain types of supported housing which are not a statutory requirement are no longer commissioned, funding levels have been reduced, or the threshold for accessing services has increased. There is evidence in some areas that some services have been decommissioned or replaced with less expensive forms of provision. Increasingly, there is a trend towards re-profiling or substituting certain elements of housing support (previously funded via commissioned services) towards intensive housing management services to be funded by Housing Benefit (under the Specified Accommodation rules). However, where charges relate to services which ‘are not connected with the provision of adequate accommodation’, they ‘shall not be eligible to be met by Housing Benefit’ (Housing Benefit Regulations. No. 213. Schedule 1. Part 1, (1) (g)). This includes ‘charges in respect of general counselling or of any other support services, whoever provides those services’ (Housing Benefit Regulations. No. 213. Schedule 1. Part 1, (f)).

29. ‘Intensive housing management’ is referred to in the ‘Housing Benefit Guidance for Supported Housing Claims, 2022. pg. 189) as ‘a term used to describe the housing management tasks that supported housing providers perform (sometimes with greater intensity) in addition to the duties of a general needs landlord’. It is important to note though that the term is not derived from Housing Benefit legislation.

30. Many stakeholders comment that funding from local authorities has, for many years, not kept pace with inflationary pressures and the rising costs of provision. Typically, the provision of the same services or more services for lower funding is required. Workforce retention and recruitment is a key challenge in maintaining the supply of specialist provision. For providers, the rising costs of provision alongside local authority funding constraints contribute to difficulties in their ability to maintain optimum levels of service provision. Given this context, many providers and commissioners question the sustainability of existing services in the longer term. Some providers feel that it is not financially viable to supply an adequate level of supported housing services for the funding available in some areas and have taken the decision to no longer tender to deliver these services. Smaller providers or charitable organisations are particularly exposed to reductions in revenue funding streams as this requires greater subsidy from charitable income streams which is not always readily available.

31. Provision of supported housing services to an individual is a key determinant in whether accommodation is considered as part of the supply of supported housing. This means that some provision delivering intensive housing management tasks only, although housing the same client groups as previously, may not be classified as supported housing or Specified Accommodation and may not be captured as supply within existing data sources.

32. Many commissioners and providers cite significant barriers in opportunities to develop new provision. Limited access to adequate levels of longer-term capital funding streams and unreliable revenue funding streams are common factors which constrain development. Other barriers include limited availability of suitable housing stock for conversion; limited availability of land, development sites and the planning system; the high cost of land, property and private sector rents; and the expensive nature of lease-based models of provision.

33. Difficulties in sustaining or expanding the supply of supported housing have occurred alongside increasing demand for supported housing provision. This increase in demand has been seen across client groups and particularly for homelessness, young people, mental health provision, and supported housing for people with learning disabilities and autistic people. The complexity of needs across client groups is also increasing. This requires more intensive and higher levels of specialist support for complex needs which also increases costs. High demand for move-on accommodation is not being met which leads to ‘blocking’ within the limited supply of supported housing available.

34. Local authority stakeholders acknowledge that increasing demand alongside static or shrinking supply is leading to significant amounts of unmet demand for supported housing. Only 8% of commissioners indicate that, in their opinion, there is no unmet need in their local authority. Over half of all commissioners stated that they have some or lots of unmet demand. This is a particular issue in some types of areas – such as areas with high market rents or in more rural locations. Unmet demand is an issue across client groups and is highest for people with mental health problems, single homelessness, people with a learning disability and autistic people, and for young people leaving care:

• 62% of commissioners report that the number of supported housing units they have commissioned over the past 5 years has increased
• 90% of commissioners feel that the budget assigned within their local authority or County Council for commissioning supported housing was insufficient to meet the demand in their area
• 86% of commissioners reported that the demand for supported housing in their local authority or County Council will increase over the next 5 years
• 31% of commissioners indicate there is a lot of unmet need for supported housing in their area and a further 21% say there is some unmet need locally

35. Providers frequently reported that they have experienced reductions in funding for commissioned services in some of their supported housing provision:

• 43% of providers stated that some of their units had been decommissioned or had funding reduced over the past 5 years
• two-thirds of providers who had funding reduced or provision decommissioned had remodelled or reduced the support services provided in these schemes

36. Substantial additional supply is needed if current levels of unmet demand in Great Britain in 2023 are to be addressed:

• between an additional 179,600 and 388,100 supported housing units are needed to address current levels of unmet demand
• approximately 91,100 units of these are needed for working age people -a lower estimate of 88,600 units are needed for older people and the upper estimate is 297,000 units

37. Many local authorities report they face significant challenges in overseeing or having the ability to exert any control over the establishment of non-commissioned supported housing in their area but that this additional supply does not always meet local needs.

How is the demand for supported housing likely to change in the future? 

38. Many local authorities find it a challenge to accurately assess the supply, demand and unmet demand for supported housing in their local area. This makes forecasting future demand and co-ordinating new provision relative to strategic need difficult. National projections of the future demand of supported housing to 2040 were developed as part of this study. These estimates take account of the current supply of supported housing in 2023 and assumptions related to the prevalence of need for care, support or supervision for various client groups as well as demographic trends. Current supply of supported housing is estimated to be 634,000 units and the projections estimate that if current rates of provision are maintained, then by 2040:

• an additional 150,500 units of supported housing would be required, an increase of 24%
• the vast majority of additional units needed by 2040 will be for housing for older people
• if current unmet need (between 179,600 and 388,100 units) grows in line with demographic trends and the prevalence of conditions, and this is also to be addressed, then this would generate the need for between 211,200 and 490,200 additional units
• taken together, the growth in current demand and unmet demand by 2040 is estimated to be between 361,700 units and 640,700 units
• this means the size of the supported housing sector would need to increase from its current size of 634,000 units to between 995,600 and 1.275 million units by 2040 if current demand and unmet demand is to be met, and demographic and prevalence rates are realised
• of the supply needed by 2040, 310,800 units will be for working age adult client groups and between 684,800 and 963,800 units will be required for older people

What are the costs of provision?

Funding for commissioned support services

39. There are two components of supported housing that require funding. The first element is for the cost of providing care, support or supervision which is provided alongside the accommodation to help tenants to live as independently as possible in the community. This can be provided as commissioned support services which are funded by local authorities, County Councils and other statutory bodies. Non-commissioned supported housing uses charitable income, self-funding by the individual receiving the support, or a supported housing provider’s other income generating activities to cover the cost of providing support services.

40. Many respondents highlight that the complexity of client needs are increasing over time and that more funding is required to deliver intensive or multi-dimensional support services. In addition, the costs of service delivery have risen substantially in recent years given the recent sustained period of high inflation. Providers commonly raise concerns about increasing expenditure due to additional costs for energy, insurance, maintenance and staffing.

41. The vast majority of commissioners and providers taking part in the study state that the funding landscape for commissioned services is increasingly challenging. Limited resources and budget constraints within local authorities impacts on the level of funding available for commissioning supported housing services. The lack of inflationary uplifts in many commissioning contracts makes it difficult to cover rising costs. For some charitable providers the increase in financial pressures when funding does not keep pace with rising costs creates a financial risk to their long-term viability as supported housing providers.

42. Maintaining staffing ratios to ensure the safety and wellbeing of residents and staff as well as quality of service provided is a key issue. The inability to fund the costs of 24 hour supervision required in some settings is of particular concern. Substitution of support services with intensive housing management services that may be funded by the Housing Benefit system is reported as common practice for example, replacing a support worker with a warden or security guard. However, it is worth noting that intensive housing management services are focussed on the provision of adequate and safe accommodation but do not provide the same level of support to the individual. In the longer term, this may lead to poorer outcomes for those who receive less individual support.

43. The average level of funding provided by local authorities (including funding from other statutory bodies) for commissioned supported housing services varies substantially across client groups. In the main, this reflects the varying level of need for support services within each client group:

• the median funding for commissioned support services for older people is £210 per week per unit - this predominantly reflects the cost of services for those in extra care provision
• the median funding for commissioned support services per unit for short-term or transitional accommodation ranges from an average of £125 per week to £250 per week across all client groups
• the median funding for commissioned support services per unit of single homelessness provision is on average £165 per week or £8,630 per year
• the median funding for commissioned support services per unit of provision for young people leaving care is on average £250 per week or £12,900 per year

44. The highest levels of average funding per unit are for support services for people with disabilities. Whilst substantial funding is required, this tends to be lower than a placement in an institutional setting. Commissioners were asked to include funding from other statutory bodies within the data they provided:

• the median funding provided for commissioned support services for people with mental health problems is an average of £408 per week or £21,216 per year per unit of provision
• the median funding for commissioned support services for people with a learning disability and autistic people is an average of £919 per week or £47,788 per year per unit of provision

45. The data on average levels of funding provided by commissioners has been combined with the stock estimates by client group, and Provider Survey data on the proportion of stock by client group which is commissioned. This allows an estimate of how much annual funding would be needed if the observed funding and commissioning patterns seen in the surveys is replicated across all local authorities in Great Britain. The estimates indicate that between:

• £2.11 billion a year would be required if the lower quartile of average funding per unit is used as the basis of an estimate
• £4.43 billion a year would be required if the median of the average funding per unit is used as the basis of the estimate

46. The large range in estimates of funding required reflects the wide variation in average funding per unit reported by local authorities for supported housing for people with learning disabilities and autistic people, and for people with physical disabilities. If the lower quartile of average funding per unit is used for these latter two groups, alongside the median level of funding per unit for all other client groups, then the estimate of overall annual funding required is £2.71 billion a year.

Funding for accommodation via the Housing Benefit system

47. The second element of funding required for supported housing is the cost of the accommodation itself. For individuals on a low income who have been assessed as needing care, support or supervision, and live in Specified Accommodation, then the cost of the accommodation (rent and eligible service charges) can be provided by the Housing Benefit system. The level of payment of rent and eligible service charges is individually assessed. People of pension age or above who do not have ‘more than minimal’ care, support or supervision needs, can still apply for Housing Benefit but under the rules for general needs accommodation. Some working age people who live in supported housing which does not meet Specified Accommodation rules can receive help with housing costs through the housing element of Universal Credit. The costs of care, support or supervision cannot be funded by Housing Benefit or Universal Credit.

48. Local authorities administer the Housing Benefit system. This includes the assessment of supported housing claimants to see if they fall within 4 categories of Specified Accommodation: Exempt Accommodation, Managed Properties, Refuges and Local Authority Hostels. A complex set of Housing Benefit regulations for each of these categories exist which are related to the type of landlord and who is responsible for providing the care, support or supervision. The rules for Specified Accommodation also determine whether rent and services charges are assessed under the pre-or post-1996 Housing Benefit regulations and the level of rent that is eligible for Housing Benefit. Many providers and Housing Benefit teams describe the process of negotiating rents and service charges for Specified Accommodation as one of the most time consuming and resource-intensive activities they undertake.

49. The Commissioner Survey indicates that 43% of respondents think that the replacement of previously commissioned support by providers with other housing-related services deemed as ‘intensive housing management’, is one of the factors contributing to the higher cost of supported housing relative to general needs provision. Intensive housing management is not defined in Housing Benefit legislation. However, intensive housing management services (which are related to the provision of adequate accommodation and are therefore deemed as eligible service charges under Housing Benefit rules) are increasingly being used to replace previously commissioned support services.

50. It needs to be remembered that intensive housing management services are not providing an equivalent level of specialist support to the individual, but instead focus on delivering the accommodation element of supported housing schemes. Therefore, Housing Benefit eligible service charges are increasingly providing funding for support related to providing adequate accommodation and are being used to replace some elements of support services for the individual which were previously funded by local authorities. Charges which are not related to the provision of adequate accommodation are ineligible service charges under Housing Benefit rules - including care, support or supervision (Housing Benefit Regulations. No. 213. Schedule 1. Part 1, (1) (f) and (g)).

51. Data from the Single Housing Benefit Extract for Great Britain indicates that the average weekly eligible rent (including eligible service charges) for Specified Accommodation Housing Benefit claims in Great Britain in November 2023 was:

• £247 per week for all Specified Accommodation
• £266 per week for working age households within Specified Accommodation
• £178 per week for pensionable age households within Specified Accommodation

This compares to the average weekly eligible rent (including eligible service charges) for Housing Benefit claims that fall within the rules for general needs accommodation in Great Britain in November 2023 of:

• £128 per week for all Housing Benefit claims assessed under the rules for general needs accommodation
• £141 per week for working age households within general needs accommodation
• £115 per week for pensionable age households within general needs accommodation

52. Combining information across data sources allows estimates of the annual cost of the accommodation element of supported housing to the benefits system, primarily through Housing Benefit payments, to be created. These estimates are based on the average Housing Benefit awards by age group for each nation, for the proportion of supported housing that receives benefits towards their housing costs, calculated separately for claims within Specified Accommodation and non-Specified Accommodation. Newly available data from the Single Housing Benefit Extract for November 2023 allows a more accurate assessment to be made than was possible in 2016. Therefore, these estimates of costs for 2023 should not be directly compared to those previously produced as part of the 2016 Supported Accommodation Review as both studies are based on different methodologies and underpinning data sources.

53. The estimated annual cost to the benefits system for all accommodation costs associated with supported housing in 2023 is:

• £4.09 billion per year for all supported housing
• 88% of which is for tenants in England, 6% is in Scotland, and 5% is in Wales
• £2.72 billion is for Specified Accommodation (67%)
• £2.35 billion is for working age provision (57%)

54. Housing Benefit regulations determine how much subsidy can be claimed back from the Department for Work and Pensions by each local authority to cover the cost of their Housing Benefit expenditure. The subsidy system is not intended to reimburse 100% of all Housing Benefit awards paid by local authorities in certain cases, particularly where the local authority is unable to restrict the rent for Exempt Accommodation claims. Whilst this is outside the control of the local authority, lower rates of subsidy still apply above the level of a Rent Officer Determination.

55. The level of subsidy varies by the type of accommodation, landlord and the eligible rent rules which apply. Subsidy loss is an increasing issue for many local authorities. Especially for some local authorities with larger numbers of non-registered providers delivering non-commissioned services as this can lead to significant shortfalls in funding or subsidy loss. The National Audit Office estimated that across local authorities in England between 2017-2018 and 2021-2022, subsidy loss more than doubled in cash terms from £53.8 million to £108 million.

How do commissioning practices vary across local authorities?

56. Evidence emerged throughout the study of varied approaches to the procurement and commissioning of housing support services being taken across different places and for different client groups. In part, these reflect national policy frameworks, local policy priorities, and funding available in local authority budgets. This means the levels of funding available, provision commissioned, and access to services is not uniform across local authorities.

57. Diverse procurement practices are deployed across local authorities and County Councils. Many are in the midst of reviewing, or have recently reviewed, supported housing services. This has led to changes in the way that services were commissioned and a move towards different supported housing models and contracts. Common procurement approaches taken include the use of block contracts, open tenders, consortia arrangements, framework agreements, negotiated contracts, and spot purchasing.

58. From local authorities’ perspectives, procurement practices often reflect local budgetary constraints and the need to reduce costs whilst ensuring statutory services are delivered. Demand for services is increasing, but these often have to be delivered within the same budget envelope. Many commissioning contracts are not index linked to inflation over the lifetime of a contract – which can often be for 3 to 5 years. Increasingly, procurement practices have moved away from the use of block contracts which guarantee funding of bedspaces or units. Often more flexible allocation of resources or consortia approaches are being introduced. At times, this can lead to limited availability of certain types of provision and an increase in the use of spot purchasing. However, this can be an expensive procurement method, is less strategic, and can result in higher transactional costs.

59. Providers generally see the shifting procurement landscape for commissioning supported housing services as challenging. Short-term contacts make it difficult for some organisations, especially smaller charitable providers, to generate stable income streams and sustain the supply of services. The move away from block contracts in some areas leads to difficulties for some providers to cover the costs of provision, especially with respect to voids, and maintain consistent revenue streams. Placements for some services require careful matching of clients to others in shared households and this can at times lead to lengthy voids which are not covered by more ad hoc approaches to commissioning services.

60. The lack of inflationary uplifts during the lifetime of contracts, especially following the recent period of high inflation, is of key concern to many providers. Their ability to cover the rising day-to-day running costs of service provision, for example increases in the living wage, without adequate funding is limited and seen as a risk to the sustainability of future service provision. Limited availability of stable revenue income streams impacts on providers’ ability to cover the costs of staffing and maintenance, invest in staff training, and retain skilled support staff.

61. Many stakeholders note that there is an ongoing evolution of commissioning practices and that many areas have been in a state of flux for many years. Changes in commissioning practices are not only associated with funding constraints but with the emergence of alternative person-centred delivery models. Many stakeholders feel that increasingly there is a need for a move away from traditional supported housing approaches for many client groups. There is a growing awareness of the potential for co-commissioning alternative delivery models which attempt to address the complexity of need using more holistic approaches. This is especially the case for commissioning practices in relation to homelessness, mental health services, and people with learning disabilities and autistic people. There is also an increasing shift towards more psychologically-informed approaches aimed at providing better support and accommodation for individuals experiencing homelessness.

62. There is evidence of good practice and holistic approaches to commissioning supported housing services across many local authorities. These include understanding local population need as well as wider engagement and consultation with a range of stakeholders and providers. Such activities take place as part of the development of plans through the standard commissioning cycle and result in more strategic approaches to sustaining and developing supported housing.

63. Well managed approaches are usually embedded in housing strategies and other local plans. These plans identify the specialist housing need in the area and how this can be addressed via existing provision or new development of supported housing. Some local authorities are setting up specialist panels and advisory groups to provide frameworks for commissioning supported accommodation services for different client groups. Groups of commissioners made up of multidisciplinary teams are also coming together to manage the housing need, discuss cases and find solutions, scrutinising and validating any new supported housing provision.

How can monitoring of the sector be improved?

64. It is widely acknowledged that there is no single comprehensive or systematic national data source which captures the scale, scope, diversity or costs of the sector (National Audit Office, 2023). The previous major exercise to assess the sector was undertaken for the 2016 Supported Accommodation Review, which is the most comprehensive evidence base to date, is now 8 years old. Secondary, administrative and regulatory data sources are generally now the most robust data available. However, often these only provide a picture of various aspects of the supported housing sector, rather than the sector as a whole, and only allow limited insights on provision for specific client groups.

65. This makes it difficult for central government departments to provide policy advice on key issues such as forecasting future demand for provision and estimating revenue requirements. Better data is needed to inform evidence-based policy and funding decisions on supported housing. These include the need to understand long-term supply requirements and funding needs to address the core and systemic issues affecting the sector. Evidence and data gaps are also seen at a local level.

66. Local authorities and County Councils commonly state it is difficult to access readily available and robust local data which informs their understanding of the demand, supply and costs of supported housing in their locality. Understanding unmet need for specific client groups is also difficult when often the data available only reflects waiting lists for existing services.

67. There are a number of overarching considerations that need to be taken into account when assessing options for future data collection and monitoring of the sector. First, the devolution of housing policy across nations makes it difficult to undertake cross national studies. Second, the breadth and accessibility of national regulatory statistics and administrative data has improved over time and this provides a useful basis for future monitoring data within nations. Third, the fragmentation of the system across local authorities means that sample surveys alone are no longer necessarily the best way to assess the size, composition and costs of the sector.

68. Further enhancements to secondary and administrative data should be considered. This includes exploring the potential to expand the variables routinely collected, for example by client group. Less frequent and targeted sample surveys could be undertaken to magnify the power of the secondary data. For example, to assess the supply of supported housing delivered by non-registered providers. Greater accessibility of a wider range of data via online tools which facilitate the exploration of more local authority level secondary and administrative data would benefit local authorities and wider stakeholders. This would assist the development of local strategic plans for assessing the supply and demand for supported housing or tracking trends over time.

69. There is significant variation across local authorities in their systems for recording funding allocated to commissioning supported housing services. Often commissioners, budget allocations and monitoring data can be held separately across different departments, on various databases, and using varying categorisations. Introducing more systematic recording of local authority funding data in a standardised format across all local authorities would allow the collation of funding information on a more systematic, standardised and regular basis. This would allow funding requirements to be assessed, trends to be identified, and benchmarks to be developed to help assess value for money. This would also provide valuable insights and understanding on the variation in access to service provision depending on where you live.

70. More harmonisation of definitions used, especially in relation to client groups, and standardisation of data requirements for providers and local authorities is needed across various secondary, administrative or regulatory data sources. This would enhance the usability of the data and improve any future monitoring exercises undertaken. Having a prescribed list of eligible services for Housing Benefit would remove some of the ambiguity and inconsistency in the system as to what is seen as fundable for Housing Benefit purposes. This has the potential to make the system more efficient, less resource intensive and more consistent for both local authorities and providers.

71. This study has demonstrated the complexity of the sector as well as the variation across places in access to provision, commissioning practices, delivery mechanisms and funding available. Enhancing future data frameworks to deliver more regular, systematic and standardised monitoring data will aid efficient delivery of the sector and ensure value for money. This would support local authorities to better understand the nature of local supply and demand for supported housing and assist them to strategically plan for future supported housing needs.