Changes to Housing Benefit – The ‘LHA Cap’

The Government is proposing to change the way that supported housing, including sheltered housing for older people, is funded. The proposed changes would see Housing Benefit for people in supported housing capped in line with the Local Housing Allowance (LHA) for general needs housing from 2019.

The costs of our housing and services are typically higher than LHA rates, which means that affected residents will be left with a shortfall.  We estimate about 70-80% of our residents receive Housing Benefit and would be affected. Under the proposals, local authorities will be allocated a ring-fenced top-up fund to cover the difference between Housing Benefit payments and the costs of housing.

The proposals can be read in full on the Funding for Supported Housing consultation page.

Our concerns

Housing & Care 21 is concerned that the financial pressures on local authorities will mean that the top-up funding will be diverted away from supported and sheltered housing, in order to pay for other more critical services that the local authorities have a statutory duty to provide. We are also concerned that the ring-fencing around the funding will not be maintained over time. The proposals would also affect different areas of the country in different ways, creating unfairness and inequality.

We have been working with two of the other largest providers of sheltered housing for older people, Anchor and Hanover, on a joint response to the consultation, and to raise awareness of the potential impact of the proposals on the provision of specialist housing for older people.

Together, we estimate that the proposals could lead to an up to £64m annual shortfall across our services. We believe the protection being offered is not fit-for-purpose and will lead to a postcode lottery, with the north and Midlands hit significantly harder than the south. Experience from the Supporting People regime, where funding was cut and the ringfence removed, highlights the reasons for our concerns.

The three organisations call for sheltered housing to be exempt from the proposals. Or if this is not possible, the decision should at least be delayed until 2022 to allow for the implementation of Universal Credit.

If the proposals go ahead, there should be a specific cap for specialist housing for older people to reflect the cost of the additional facilities provided.

A joint statement has been issued by the chief executives of the three organisations.

Jane Ashcroft of Anchor, Clare Tickell of Hanover and Bruce Moore of Housing & Care 21 said:

“The proposals create huge uncertainty for older people and risk breaking a part of the housing system that works well.

“With an ageing society and growing pressure on the NHS, sheltered housing has never been in greater need. There is strong evidence that investment in such services saves money for the state.

 “The Housing White Paper talked about the merits of older people downsizing. Yet these proposals could have the opposite effect - reducing the number of properties available to do just that.

“We are glad the government are listening to concerns. It’s crucial that now translates into action.”

As well as working with the two other leading providers, Housing & Care 21 has written to MPs and local authorities to raise its concerns and has started working with residents to make them aware of the proposals.