Overview
London Councils welcomes the ambition of the Supported Housing (Regulatory Oversight) Bill to raise standards in the supported housing accommodation sector. The Bill 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 control. London boroughs have a stake and key role in the commissioning, delivery, and provision of high-quality supported housing, 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. The Bill will introduce significant new duties for local authorities, which will need to be funded and resourced. It will also be important that standards are raised in a way which does not lead to large numbers of providers suddenly exiting the already over-stretched supported housing sector, and that the impact of new legislation on good providers is minimised.
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 policymakers understood the importance of maintaining supported housing supply which would have otherwise become unviable due to Local Housing Allowance (LHA) limits. When ringfenced 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 for 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 as part of 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 UK 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 sub-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 of 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 on supported housing registration and standards.
- Local authorities to publish a Supported Housing Strategy, including the availability of exempt accommodation and an assessment of 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 inform policy development.
- An option for the Secretary of State 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, National Housing Federation, and the Regulator for 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 Bill is expected to pass into law.
London boroughs currently have few effective powers to ensure existing exempt accommodation provides good housing and support services to residents. There are significant challenges with 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 significant 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 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 Care Quality Commission. This could support local authorities in their licensing and enforcement functions.
Impact on supply of supported housing
London Councils notes that there has been sincere 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 needs to be given to minimising the impact of new legislation on those 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 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.
The 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.
