Local Housing Allowance Cap and Supported Housing

Thank you for contacting me about supported housing. 
Supported accommodation plays a vital role for many vulnerable people. I can assure you that the Government is committed to both building a secure long-term funding framework for the sector and encouraging further development in the sector. 
The changes to Housing Benefit announced in the 2015 Autumn Statement involve aligning the rules for claimants in the social sector with those for claimants renting privately. This means extending the Local Housing Allowance (LHA) rules, which limit the amount of rent which Housing Benefit will cover, to the social sector. Let me assure you, however, that the Government recognises the importance of ensuring those who are providing supported accommodation to some of the most vulnerable members of our society receive appropriate protections. That is why Government departments have been engaging closely with providers to better understand the issues faced by the supported housing sector.
As a result of these discussions, the Government has decided to delay the implementation of the LHA cap for all social housing to 2019. From 2019 the LHA rules for Housing Benefit will apply to social sector housing, including supported housing. However, for supported housing this will not include the Shared Accommodation Rate, in recognition of the particular challenges this would have placed on tenants. To reflect the higher average costs of offering supported accommodation, which may go above the level of Local Housing Allowance, the Government will devolve 'top up' funding to local authorities (and to the devolved administrations in Wales and Scotland). This will give local authorities an enhanced role in commissioning supported housing, and allow them to take a more coherent approach to planning for housing needs in their area.     
I am proud that the Government is doing so much to support disabled people. Around £50 billion is spent every year on benefits to support people with disabilities or health conditions, in fact spending is higher than it was in 2010. Funding for the Disabled Facilities Grant, which helps disabled people make adaptations to their home, is being increased. The Government is also spending £400 million on delivering 8,000 specialist homes for the vulnerable, elderly or those with disabilities.
I recognise that the supported housing sector provides essential support to some of our country's most vulnerable people. In recognition of this, the top-up fund will be ring-fenced to ensure it continues to support these people. A consultation process has also taken place to explore additional safeguards for the vulnerable. I am proud that mental health suffering is taken seriously by this country. Progress is being made with more Government investment in mental health and an estimated 1,400 more people accessing mental health services every day compared to 2010 - up 40 per cent, as well as an additional £1 billion being spent on mental health services by 2020.
On the issue of domestic violence, Ministers are aware of the specific issues faced by women's refuges. The Government is listening to the views and concerns of providers and is working to ensure refuges continue to receive appropriate funding for their important work. While the funding mechanism for shorter-term accommodation such as refuges may be different from the rest of the sector, I can assure you refuges will benefit from the same protection being given to the supported housing sector in general. Refuges will also be entirely exempt from the requirement for social sector housing providers to reduce rents by one per cent each year for four years.

The Government ran a consultation on developing the details of this new funding model for the supported housing sector, and is currently considering its response. I welcome the considered approach the Government has taken on this issue, and hope that providers will continue to engage with the Government to ensure the new model is effective and appropriate.   
Thank you again for contacting me.


Updated: September 2017