Overview
The Supported Housing (Regulatory Oversight) Bill has passed through the House of Commons and is now in the House of Lords, where it is sponsored by Lord Best, a housing specialist crossbencher. The government has indicated its support for the Bill, which passed its second reading in the Lords on 21 April 2023.
London Councils welcomes the ambition of the Supported Housing (Regulatory Oversight) Bill to raise standards of benefit “exempted” stock within the supported housing accommodation sector. It will also aim to regulate out unacceptably poor-quality supported housing schemes funded by exempt benefit rules. the Bill makes provisions for nationally established, minimum standards through regulation and place-based licensing controls, including across the following types of schemes and services: Housing with Care, Supported Living, Extra Care, Homeless Accommodation, Refuges, Housing with Support for Mental Health, Drug Addiction, and Alcohol Addiction. We understand Retirement living and Care Quality Commission (CQC) registered care homes are not within scope.
Local authorities in London have a stake and key role in the commissioning, delivery, and provision of high-quality supported housing locally to support residents with housing and care needs, alongside other key public service partners. London Councils continues to make the evidence-based case for longer-term and higher revenue funding, as well as capital funding to bring forward new schemes and retain existing high-quality provisions for our communities. This would enable an increase in the supply of stock within the supported housing sector, while improving quality where necessary in a way that meets our residents’ needs for the future.
Should this Bill become law this summer, an expert panel is expected to be established to develop new regulations and a common local authority licensing approach to supported housing through research and consultation, including with local authorities. We expect consultations on implementing the Bill’s provisions after May 2023 and May 2024.
Background
Exempt supported accommodation is exempt from certain benefit provisions. This means higher payments can be made to providers for this type of accommodation than is ordinarily the case, based on the additional provision of care or supervision to residents by the landlord. This type of accommodation originally emerged as policy makers understood the importance of maintaining supported housing supply which would have otherwise become unviable due to Local Housing Allowance (LHA) limits. As has been recognised by sector leaders and debated in both houses during this bill’s passage, when ring-fenced Supporting People funding was removed in the late 2000s, exempt accommodation grew in scale.
There is a national shortage of supported housing and social housing more generally. Exempt accommodation includes hostels, refuges, group homes, supported living schemes and sheltered housing. It is intended as housing for people with support needs such as homeless people, people with mental health needs, people with drug misuse issues, prison leavers, care leavers and those who have experienced domestic abuse. These groups tend to have more difficulty in finding suitable housing (including when requiring health support), a trend that is exacerbated by constrained housing supply.
Supported accommodation can be run by a variety of landlords and organisations. It is not subject to a single regulator or set of national regulations. In cases where housing associations are the provider, they are registered with the Regulator of Social Housing and regulated by its framework. Where the provider is not a registered social landlord, neither the Regulator of Social Housing nor local authorities can prevent the establishment of new schemes, regulate standards or take action against low quality housing and services.
The current evidence base around the scale of the issue is incomplete and difficult to quantify. The Government has surveyed local authorities to feed into a more detailed data report on this subject, which we understand will be published by the end of 2023. Addressing the lack of consistent, detailed records of providers and their schemes, or lack of data on the number of homes judged to be poor quality, is one of the primary drivers behind the Bill. The number of people in the United Kingdom housed in exempt accommodation is estimated to be around 150,000 households, an increase of around 60% from 2016.
There are well-publicised concerns that some providers are abusing the system by buying or leasing large houses to convert into multiple units of accommodation, to make greater profits at the expense of the public purse, while providing housing and support services to residents that could be deemed unacceptable.
Exempt accommodation can also have a considerable impact on local authority budgets. Local authorities, through their benefits departments, pay 40% of costs where providers are not Registered Providers. Research by Inside Housing has shown that Lambeth paid £26 million in such costs in 2021-22, Kensington and Chelsea £15 million, Enfield £14 million and Hammersmith and Fulham £12 million.
Proposed changes in the Bill
The Supported Housing (Regulatory Oversight) Bill makes provision for:
- The establishment of nationally set minimum standards of supported housing and support, care and supervision for the sector.
- Local authorities to take on a new licensing role and enforcement powers for those standards and licence conditions in their area.
- Powers for the Secretary of State to be able to designate all local authority districts as subject to the new licensing regulations around supported housing registration and standards.
- Local authorities to publish a Supported Housing Strategy, including identifying the availability of supported accommodation and assess likely need for this accommodation in their area over the next five years, repeated on a five-yearly basis.
- Local authorities to publish a Supported Housing Needs Assessment for residents.
- People leaving exempt accommodation that does not meet the national standards will not be classed as intentionally homeless.
- The establishment of a national oversight committee with expertise intended to develop proposals for reform and to inform policy development.
- The Secretary of State would have an option to introduce a new planning use class for exempt accommodation in locations experiencing an over-concentration of such schemes.
- The Bill also indicates that a statutory consultation of local housing authorities, social service authorities, the National Housing Federation, and the Regulator of Social Housing will be undertaken.
London Councils’ views on the Bill
Raising standards, provisions for new licensing and enforcement powers
London Councils welcomes the Bill’s intention to raise standards in the exempt accommodation sector and supports the intent of provisions for new licensing and enforcement powers for local authorities. We welcome the government’s recorded commitment to a new burdens assessment, considering the costs of increased activity for local authorities, including writing new supported housing strategies, local needs assessments and licensing powers, however this funding needs to fully cover the costs of what will be resource intensive and complex new responsibilities for councils. This assessment and its outcome are due to take place after the expected passage into law of the Bill.
London boroughs have few effective powers currently to ensure existing exempt accommodation provides good quality housing and support services to residents. At present, London faces significant challenges in bringing forward new supported housing developments, with anecdotal evidence that existing schemes are increasingly struggling to remain financially viable. Local authorities have a strong interest in new schemes being established and fully supported through revenue funding to meet the costs of accommodation and support. London Councils is particularly concerned about the conversion of houses into multiple-occupancy schemes where support, care and supervision can be minimal and very high rents charged.
To make proposals for local authorities to grant licences, check standards and licence conditions and take enforcement action workable, we are calling for:
- A sufficient new burdens settlement to fully cover the cost of implementing and administering the new burdens.
- Detailed guidance on implementing the new responsibilities following the passage of the Bill accompanying engagement and consultations.
- Clarification of whether all individual local authority licensing schemes would require sign-off by the Secretary of State.
- Sufficient time to respond to the consultation on regulations and, after that, to prepare for the new licensing regime.
Consideration should also be given to requiring all providers to become Registered Providers, subject to regulation by the Regulator of Social Housing (with this being reasonably accessible for smaller providers) and/or the CQC. This could support local authorities in their licensing and enforcement functions.
Impact on supply of supported housing
London Councils notes that there has been recognition of the potential impact the legislation and subsequent regulations may have on reducing the supply of supported housing. There is a dire need to bring forward more high-quality supported accommodation with housing, care and support. Hostels and refuges play a particularly vital role in addressing homelessness and supporting people who have experienced domestic abuse. While standards need to be raised within parts of the sector, it must be done in a way that does not lead to a considerable number of good quality providers, such as smaller charities and faith-based organisations, suddenly withdrawing from the market and leaving a gap which local authorities are unable to fill. Consideration also needs to be given to minimising the impact of new legislation on good providers.
Resourcing local authorities
London Councils is concerned that the Bill will introduce significant new duties on local authorities – including in relation to regulatory oversight, strategy development and homelessness duties – with a new burdens assessment promised but with no clarity as of yet regarding likely levels of funding. If the objective of raising standards in exempt accommodation is to be met, local authorities will need to be sufficiently resourced to deliver on their new duties.
Government should also consider establishing dedicated funding streams for local authorities to distribute to supported housing schemes to cover revenue costs of services which could unlock greater and more sustainable supported housing supply. The success of the Rough Sleeping Accommodation Programme, developed as part of the response to ‘Everyone In’, also provides a good template for how the joined-up provision of capital and revenue grant funding can enable the delivery of much needed new supported housing schemes. Ongoing budgets to cover the revenue funding of existing schemes could also better support the maintenance and improved quality of existing schemes. Accompanying the proposed regulation and licensing controls, dedicated, longer-term funding streams would equip local authorities with more of the tools and capacity they need to retain, sustainably develop and commission the supported housing accommodation services they know are needed in their area.