PROBLEMS
178. When we began this inquiry, local authority
allocations for financial year 2005-06 had not been announced;
they were published in December 2004. It was widely assumed beforehand
that grants would be cut down from the 2004-05 allocations. Centrepoint
said "it is difficult to make predictions…this appears
to be a cut of roughly 7% in real terms".[234]
Unsurprisingly, this was not welcome. There were suspicions that
this cut was in part caused by the administration expense of the
programme. Lord Rooker told us this was not the case:
"Any cuts faced by providers next year
should only arise through negotiation or following a service review.
This is a separate issue to the administration of the programme".[235]
He also assured us that the cost of making a bid
was refunded to successful applicants. "Procurement costs
normally form part of an organisation's overheads which would
then be recovered if the contract was won". [236]
This is not reassuring to those organisations who must use money
that could be used on programmes to put together a bid. Prime
Focus, in Birmingham, told us that they spent at least £150,000
on their application this year, with no guarantee of success.[237]
179. In oral evidence, the Salvation Army told us
"the Approved Development Programme from
the Housing Corporation, which has been approximately £1
billion a year over the last two to three years for supported
housing projects, was running at about nine or ten per cent and
it is now down to three per cent. You have a situation where the
throughput of schemes is not happening because the corporation
are not able to provide the capital funding because there is no
guarantee of Supporting People funding being available".[238]
180. This is only one of the many complaints we have
heard about the Supporting People programme in the course of our
inquiry. Other criticisms surrounded the year on year nature of
the programme grants. This leads to uncertainty and prevents long-term
planning. Projects, even short ones, which need planning over
a year in advance may not be feasible. In addition, bids must
be made each year, so in effect a body must begin to prepare its
bid almost as soon as it has received the previous allocation.
We heard in Birmingham that Supporting People funding was targeted
towards certain areas, which left others struggling to attract
staff. Supporting People funding is, of course, capped each year.
This leaves limited room for year on year expansion. The Salvation
Army demonstrate above one of the major pitfalls of this: the
Housing Corporation will not invest in, and voluntary organisations
and local authorities see no point in building facilities for
which funds for staff and support cannot be guaranteed.
181. We also heard strident criticism in Birmingham
of the review process. Projects are reviewed each year: those
that fail do not receive funding for the following year. St Basil's
compared the Supporting People review to the Audit Commission
review they had undergone before it. The SP review looked entirely
at the process of the projects, and consumed a great deal of staff
time, but did not evaluate outcomes. St Basil's suggested that
the administrators reconsidered their review procedures to bring
them more into line with Audit Commission practice.
182. We explored these
problems with ODPM in correspondence, and we remain to be convinced
that the department has grasped the difficulties facing people
applying for and receiving SP funding. The Supporting People programme
is too large an issue to address in any depth in this Report and
so we intend to return to the subject in a separate inquiry. We
hope to see criticisms decrease as the findings of the Rhodes
review take effect.
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