Housing associations 'just about keeping the show on the road' after Supporting People cuts

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

A specially organised 24housing magazine roundtable event with PlaceShapers member housing associations reveals the true extent of Supporting People cuts. But instead of walking away, members are pulling out all the stops to keep schemes going. Ross Macmillan reports.

It was a senior housing professional that said to me recently that she had “never seen a programme unravel as quickly as Supporting People (SP)”.

And while a 24housing magazine-hosted roundtable, featuring members of the PlaceShapers group of housing associations, confirmed this, it also gave landlords an opportunity to present the case for investment directly to government.

Jon Bright – director of homelessness and support at the Department for Communities and Local Government (DCLG) – revealed that since the Supporting People funding was lumped into the formula grant, DCLG hasn’t and doesn’t have an accurate picture on the ground.

He said the department was “pleased” that it had virtually maintained SP funding levels – £6.5 billion over the course of the Spending Review (a 1 percent cash reduction in funding each year) – but was aware, anecdotally, of how councils were making larger than necessary spending cuts to the programme.

“We’ve commissioned the CIH to find out a little bit more for us. The Secretary of State is very committed to localism so one of the aspects of that is we don’t want to impose target setting or onerous reporting processes on localities. That includes the collection of data. So we’re not really in a position to understand what’s going on.”

He also emphasised the department’s preferred area of exploration – citing the Government-backed personal budgets and payment-by-results pilots for SP services currently being trialled by selective councils.

Above all, the discussion revealed the extraordinary lengths some PlaceShapers landlords are going to in a bid to keep services going. Bright later interpreted the picture as “just about keeping the show on the road”.

Councils re-commissioning contracts for less is common. This, in turn, is forcing some landlords into consortiums and most into redundancies or staff pay cuts or both to re-win contracts.

But there’s something else happening too. More private providers are bidding for the work – as some councils seek cheaper rates – with fears that it will create a “race to the bottom”.

The cuts

Mike Muir, CEO of Cumbria-based Impact Housing, said the county council put its Supporting People contracts out to tender last year.

“They went down from £9.6m to £6.4m,” he said. “200 providers from all over the country came to their open day and not one national provider who wasn’t already working with the county then bid, so it’s pretty clear the rates are low and there are no economies of scale, etc.”

He says Impact has re-won contracts and gained others, but it has come at a price. “The county has got more competitive rates but we have reduced the pay and conditions of staff by between 15 percent and 25 percent.”

Muir’s main concern, however, is the lack of support for smaller organisations – and further cuts down the line. He said Impact “felt a duty” to try to link up and provide a consortium with some of the smaller local organisations “being forced out of business by the commissioning approach of the county”.

Dr Chris Handy, chief executive of Midlands-based Accord, says four years ago it was getting around £3.5m in terms of SP funding. It is now down to about £1.2m. He said: “We’re moving over to different payment mechanisms and approaches. There is immense variability around funding constraints. We’re working with some local authorities where the figures have stayed the same right the way through the last three or four years, to those authorities where we’ve had cuts of around 15-20 percent on SP contracts.

“We’ve certainly had some contracts where we felt the quality of those would have been so badly compromised we haven’t continued. For example, there was a drug and alcohol dependency project in Birmingham which we couldn’t run at the price so we pulled out of it.”

Handy reveals, however, that while the overall service is still paying its way, elements are in the red. “We’ve decided to support those services so they don’t get lost because we think they’re strategically or locally important to continue,” he says. “We’ve cut salary costs and made redundancies to make it work.”

“The associations you’ve got around the table are the ones that aren’t going to turn their backs on care and support,” says PlaceShapers chair and South Yorkshire Housing Association (SYHA) chief Tony Stacey.  “For every association in here, there’s another outside the room who feels it may be too risky and they’ll walk away.”

Such resolve can be seen by a Shropshire-based social landlord operating within a new unitary authority which was previously five districts.

Whereas SP services differed between the patchy provision in the North and huge growth in the South – the council took the decision to re-commission the SP services with a view to having a county-wide offer. It meant that services in the South – where Shropshire Housing Group (SHG) started – were massively slashed in order to provide a more aligned approach across the whole county.

“They cut the money available and increased the number of outcomes that they expected,” says Ann Sutcliffe, executive director of neighbourhoods at SHG. “It created a real push for innovation. So what we did at SHG was form a consortium with two of the other biggest stock holding landlords in the county to create a county-wide offer.”

Sutcliffe says it initially caused some complexities for tenants as it was offering support into another landlord’s stock and vice versa.

“The other benefits of the consortium were that we were able to host about 15 other smaller support providers in the county-wide bid.”

Other local authorities – such as Barnsley, Sheffield and Derbyshire – are also hinting at desires for providers to collaborate in consortia, explains Tim Fordham, care services manager at SYHA.

Looking ahead to payment-by-results models – which could see councils pay the bulk of the cash up front with the rest paid after outcomes have been delivered – PlaceShapers members raised concerns around the length of agreements and the impact on staff and customers. “If the trade off is longer contracts then that’s fine – you’ve got a longer lead into your payments; longer procedures – you’ve got to have longer contracts,” says Mike Muir. “If we’ve got longer contracts we can start to drive efficiencies and continuity.” However, he warned if payment-by-results meant shorter-term contracts you’d have “no continuity of service and no continuity of relationships with staff, customers and commissioners”.

David Bogle, chief executive of Hightown Praetorian and Churches Housing Association – which has held on to all of its care and support contracts – warned that ultimately housing associations have a choice whether they want to be in this arena or not. “We can say, to a certain extent, that if we can’t have the money to support the residents we may consider turning the housing into general needs.”

Welfare reform

Nearly all the landlords around the table agree that with margins tight, welfare reform – which brings with it a household benefit cap and benefits paid directly to individuals – could be the straw that breaks the camel’s back. In addition to SP funding, appropriate levels of housing benefit – covering both rent and services charges – are crucial in making SP services stack up financially for landlords, but the Government is determined to cut the welfare bill.

Members raise concerns over service charge reform, the direct payment of Universal Credit to claimants – which will exclude “the vulnerable” (although no definition has yet been forthcoming) – and the household benefit cap.

Bright emphasises that the role of DCLG in welfare reform is to inform the DWP of the “unintended consequences”. He called on PlaceShapers to become a “source of information” for the DCLG and urged them to collect robust evidence the department could use to fight the case for investment and highlight the unintended consequences of welfare reform.