Funding of Supported Housing and the benefits system – UK Government policy statement and consultations launched on 31st October 2017

1.0 Background

On 25th October, the Prime Minister announced that the Local Housing Allowance cap will not be applied to social rented housing / supported housing.   This followed widespread concern from the supported housing sector as well as cross party calls for a re-think during recent parliamentary debates.  The announcement comes after two years of what had become a barrier to the development of any new supported housing or investment in improving existing services and growing uncertainty about existing services.

Further details about the future funding of supported housing were published on 31st October along with two consultation documents[1].  Set out below are key points contained within the policy statement along with an initial examination of the implications for Scotland.

2.0 Timescale

The date for any change to current benefit entitlement in supported housing has been put back to 2020 (from 2019). This is welcome news but still presents a tight timescale for designing and implementing the changes, particularly if there is to be any kind of pilot to inform policy development – something which the SFHA and HSEU pressed for whilst contributing to the work of the UK Government’s Short Term Supported Housing Task and Finish Group[2].

3.0 Categories of supported housing

The UK Government has recognised the diverse nature of supported housing and has decided to create 3 categories of supported housing:

3.1 Sheltered and extra care housing – this can include housing for adults of any age although most is occupied by older people. It is not clear at this stage whether retirement housing (former sheltered housing) fits within this category.

3.2 Short term supported housing – for people looking to move onto more permanent housing within a period of up to 2 years. The consultation documents defines short term supported housing as: ‘Accommodation with support, accessed following a point of crisis or as part of a transition to living independently, and provided for a period of up to 2 years or until transition to suitable long-term stable accommodation is found, whichever occurs first.’ This includes hostels for people who are homeless, refuges for women fleeing violence, supported housing for people who are facing substance misuse and people who require transitional help such as young people and care leavers.

3.3 Long term supported housing for people not looking to move on to other housing eg people with learning disabilities or mental ill health.

4.0 Key features of the new approach

The way the benefits system will deal with each of the 3 categories of supported housing will vary:

4.1 Sheltered and extra care housing will continue to be funded through the welfare benefit system for those that need financial support. From 2020, however, a new ‘sheltered rent’ will come into force for new housing supply in England. Our understanding is that there will not be a need for a new ‘sheltered rent’ in Scotland.[3]  The definition of sheltered and extra care housing is under consultation.  The  consultation asks about the defining features of sheltered housing and extra care housing and acknowledges that communal facilities and design features around accessibility could be indicators of sheltered housing.  This may be significant in determining whether retirement housing comes within the scope of the new sheltered housing category or not. The definition is important in Scotland because it will govern which services will be able to recover full rent and eligible service charge through the benefit system.

4.2 Short term supported accommodation and transitional supported housing will be funded in England through local authority grants. The grant will be awarded to the local authority according to the amount of funding the benefit system has been contributing. The individual will not be required to contribute to the cost.

In England there will be a new system of oversight to ensure quality services and good outcomes. This is something that the UK Government acknowledges is already broadly in place in Scotland though the regulation of housing support services.

In England local authorities will be required to provide the UK Government with information about its provision, needs and plans as well as twice yearly reporting on client groups and occupancy length. There is an expectation that local authorities work together in England to ensure that people can move between areas and still be able to access this type of housing if need be. The strengths of this model are that:

  • it brings the awarding of funding for both the housing and the support elements of the service together
  • it removes the need for administration associated with managing rent accounts and rent collection
  • tenants in work will not put their housing at risk because they will not be subject to higher rent levels
  • support services will not need to spend time helping a tenant to claim benefit for housing related costs (though tenants may still be claiming UC for non-housing living costs)

There are some challenges / concerns however:

  • pressure on local authority funding, particularly for the housing support element of the service, may result in inadequate funding for short term supported housing
  • grant funding would be awarded on a fixed term basis, possibly one, two or three years which would not provide the required level of financial security to invest in new or refurbished provision
  • access to emergency or short term supported housing may become more complicated as LA scrutiny of access arrangements will likely increase
  • potentially harder for people to access services in an area where they have no local connection or cannot demonstrate one
  • having no obligation to pay rent does not help tenants to prepare for taking on the responsibilities of a mainstream tenancy.

In Scotland a devolved grant will be awarded to the Scottish Government. The Scottish Government will decide how it will go about managing and administering the devolved grant. It is likely that one of the options to be considered will be local authorities or integrated authorities managing the funding.  This would merit further examination of the strengths and challenges of such an approach as set out above.

The implications of this approach are that individuals will not be entitled to assistance with housing costs in short term supported housing such as hostels and refuges. Instead funding would be provided through a grant to the service as a whole.   This could mean that housing costs would be subject to fixed term contracts of eg 1, 2 or 3 years.

4.3 Long term supported housing

The UK Government plans to continue to fund rent and eligible service charges through the benefit system.

The Scottish Government has advised that Long Term Supported Housing will remain within housing benefits and will continue to be excluded from Universal Credit. This will be important as it keeps housing costs out of benefit cap calculations and means that service charges relating to maintaining / servicing adaptations / equipment in a person’s home continue to be eligible service charges.  By 2022, however, the expectation is that Long Term Supported Housing will be moved to Universal Credit.

5.0 Where do we go from here?

At the event organised by the Unit on 9th November the Scottish Government made a commitment to discuss the way that Scotland can consider the broader context within which these changes are taking place – particularly associated with short term supported housing.

The Scottish Government has established a Supported Accommodation Steering Group to assist it to explore and evaluate options. The Group will meet for a second time at the end of November and it is expected that the Group will assist the SG to decide what sort of information gathering and consultation relating to short term supported accommodation needs to be carried out in Scotland early next year.  The HSEU is on this group.

The two DWP/DCLG consultations (closing date 23rd January 2018) provide an opportunity for stakeholders in Scotland to consider and develop a view on the following issues:

  • How to develop a definition of sheltered and extra care housing on the basis of key features
  • The definition of short term supported housing as set out by the DWP/DCLG
  • Ways to enable access to short term supported housing where there is no local connection
  • Ways to develop ‘greater cost control’ in long term supported housing

If you wish to feed into the HSEU’s response to the UK wide consultations or help to influence the decisions made through the Scottish Government’s Supported Accommodation Steering Group please contact Yvette Burgess at


[1] Funding Supported Housing: Policy Statement and Consultation, October 2017. Department for Communities and Local Government and Department for Work and Pensions.   (accessed 20th November 2017)


[2] Supported Housing Task and Finish Groups – Final Reports, October 2017.  Department for Communities and Local Government and Department for Work and Pensions. (Page  42) (accessed 20th November 2017)


[3] Department for Work and Pensions, set this out at the HSEU event on 9th November 2017 in Edinburgh.



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