Welfare and Work Bill Committee

Written evidence submitted by St Mungo’s Broadway (WRW 32)

About St Mungo’s Broadway

Our vision is that everyone has a place to call home and can fulfil their hopes and ambitions. As a homelessness charity and housing association our clients are at the heart of what we do.

We provide a bed and support to more than 2,500 people a night who are either homeless or at risk, and work to prevent homelessness, helping about 25,000 people a year. We support men and women through more than 250 projects including emergency, hostel and supported housing services, advice services and specialist health, skills and employment services.

We currently work across London and the south of England, as well as managing major homelessness sector projects such as StreetLink and the Combined Homeless and Information Network (CHAIN).

We influence and campaign nationally to help people to rebuild their lives.

1. Summary of key points :

1.1. Our evidence focuses on the reduction in social housing rents.

1.2. We are seriously concerned that the requirement to reduce rents in social housing in England by one per cent per year for four years will result in the loss of supported housing schemes for homeless and vulnerable people.

1.3. Section 20 of the Welfare Reform and Work Bill should be amended to include rents charged in ‘specified accommodation’ among the list of exceptions to the rent reduction requirement that are already listed.

1.4. Rents in supported housing have to cover a much wider range of housing management and maintenance activities than rents in general needs social housing. This is due to the needs of supported housing tenants.

1.5. St Mungo’s Broadway has estimated that the rent reduction requirement would result in the loss of £1.25 million in rental income by year four, income which would have otherwise been used for essential maintenance and to help homeless and vulnerable people maintain their accommodation.

1.6. This proposed cut to rental income comes after five years of significant cuts to funding for support for vulnerable people. The National Audit Office (NAO) found local authority spending on the Supporting People programme had fallen, on average, by 45% between 2010/11 and 2013/14. Spending cuts are projected to be even more severe during the next five years.

1.7. Given the higher cost of housing management and maintenance, some supported housing schemes for homeless and vulnerable people are less likely to be able to absorb the reduction in their rental income and will be forced to close. This will lead to an increase in homelessness and rough sleeping, particularly in London.

2. Detailed explanation of our proposed amendment

2.1 Section 19 of the Welfare Reform and Work Bill introduces the rent reduction requirement. Section 19 states that: "Registered providers of social housing must secure that the amount of rent payable in a relevant year by a tenant of their social housing in England is 1% less than the amount that was payable by the tenant in the preceding 12 months."

2.2 Section 20 of the Bill lists a number of exceptions, describing when section 19 of the Bill would not apply. We recommend an amendment to section 20 of the Bill to add rents charged in ‘specified accommodation’ to the list of exceptions. The following wording might be appropriate: "Section 19 does not apply in relation to a tenant of social housing if the accommodation is specified accommodation."

2.3 Specified accommodation is a status which came into law in 2014 through the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014 (SI2014 No. 771). Specified accommodation has a different purpose to general needs accommodation. It is defined as housing where care, support, or supervision is provided. People who live in specified accommodation have support needs that generally mean they would find it difficult to sustain accommodation in which support was not provided. These support needs might be related to homelessness, mental health issues, offending, domestic violence, substance use or any combination of these.

2.4 The rationale for treating supported housing separately from other social housing has already been recognised in the decision by government to keep housing costs for ‘specified accommodation’ out of Universal Credit and benefit cap calculations. This provides a practical precedent. It would be wrong to undo these steps the government has already taken to help protect housing for the most vulnerable.   

2.5 The Department for Work and Pensions and the Department for Communities and Local Government have commissioned a review into supported accommodation in order to establish a better evidence base for future funding decisions. Therefore, the government should wait for the outcome of the review before introducing changes that have any significant impact on the income of supported housing providers.

2.6 Housing benefit is currently the primary means by which supported housing residents fund their housing costs. As such, they would not benefit directly from lower rents. If existing supported housing units shut down, the rent reduction would have a negative impact on residents.

3. Intensive housing management

3.1 Supported housing provides accommodation and vital support to help people recover from homelessness and to gain the skills and confidence needed to live independently. Rents in supported housing cover a much wider range of housing management and maintenance activities than rents in general needs social housing. This is due to the needs of supported housing tenants.

3.2 St Mungo’s Broadway, along with a small number of other homelessness charities and housing associations , provides housing and support to people with very high support needs. Our tenants are our clients. Among the clients in our housing services 52% have slept rough, 72% have a mental health need, 44% have a significant physical health condition and 56% have a substance use problem. These problems often overlap and are rooted in repeated experiences of trauma from a young age. 22% of our clients have experienced violence or abuse from a family member or partner. Only 8% are currently working. [1]

3.3 In addition to providing the right support to help our clients make a sustained recovery from the issues that led to their homelessness, we must provide intensive housing management to ensure the physical condition of the property meets the needs of our clients and that they are able to sustain their tenancy. Intensive housing management is paid for from rental income. The requirements are much higher than in general needs housing. Heavy wear and tear is much more likely due to more rapid turnover of accommodation units as people move on to more settled accommodation and can be related to their higher needs and ability to care for their accommodation .

3.4 All of our housing meets DCLG requirements to be free of health and safety hazards, be in a reasonable state of repair, have reasonably modern kitchens, bathrooms and boilers and be reasonably insulated. We also try to create recovery oriented environments, where design, decoration and furnishing is carefully considered and of a good standard.

3.5 The minimum frequency for decorating internal communal areas in our properties is every three years, and every five years for external areas. Again, the costs associated with maintaining communal space are higher than in general needs housing where there are fewer common areas.

3.6 Tenancy management is also a more intensive task. As a homelessness organisation we actively seek to house people with an unsettled and/or unsuccessful housing track record. The experiences and problems that have contributed to our clients’ homelessness also make it more likely they will act in a way that puts their tenancy with us at risk.

3.7 A history of poor money management and debt is common among our clients. 43% of our residential clients have difficulty managing their money. Our staff spend a lot of time ensuring our clients can pay the service charge they are expected to pay in addition to their housing benefit payment, as well as dealing with other situations involving conflict or risk to help avoid eviction. W e actively seek to house people with an unsettled or unsuccessful housing track record.

4. Tenant turnover

4.1 Minimising the number of void bed spaces has been a longstanding key performance indicator for St Mungo’s Broadway, reflecting their importance both in terms of financial cost, but also the moral importance for a homelessness organisation of maximising use of available accommodation.

4.2 However, some void bed spaces are inevitable. The temporary nature of our accommodation with a focus on positive moves through our services, and the fact that the majority of our housing is shared rather than self contained, means that resident turnover is high. We activel y seek to promote resettlement, making space for those in greater need. Therefore, the number of units that become vacant every year is much higher than in general needs housing, where turnover rates are typically well below 10%.

4.3 In St Mungo’s rented bed spaces in 2013-14 there were 2,143 new occupants for 1,791 bed spaces. This is a turnover rate of 120 % , revealing that some residents move through our services within months, rather than years. Turnover rates vary depending on the service type. We run a number of assessment centres which usually operate as part of a local authority vulnerable adults pathway and move people through very quickly to more appropriate accommodation. In 2013-14 there were 515 new occupants in 83 St Mungo’s assessment centre bed spaces. Our hostel accommodation and specialist complex needs housing also has a high turnover. In semi independent housing services, the turnover rate was slightly lower at 73 %.

4.4 When bed spaces become vacant, there are costs associated with cleaning and redecoration to a suitable standard for the next tenant. There are also costs associated with lost rental income while waiting for a suitable referral. Given the specialist nature of supported housing, it is much harder to ensure suitable, sufficient referrals at the right time than in general needs housing.

6. Impact on developmen t

6.1 Grant funding for general needs housing development has fallen significantly in recent years, but so has funding for specialist programmes aimed at improving homelessness provision.

6.2 In the past St Mungo's was able to call on almost 100% grant funding from government to support acquisitions and development. However, recent programmes, such as the Homelessness Change programme, have seen typical grant rates at just 40%.

6.3 Therefore, even in supported housing, the ability to expand to help meet the housing demand is dependent on stable rental income in order to improve access to development finance and to generate a surplus to reinvest.

6.4 We would like to invest in new properties and plans were in place to purchase 26 additional units over the next three years. It will not be possible to pursue these plans if the rent reduction requirement is applied. This is frustrating when the availability of genuinely affordable housing is so limited. Increasing our own stock is one of the ways we can ensure that there is more housing available for people who would otherwise be homeless or even sleeping rough.

8. Preventing costs arising elsewhere

8.1 As stated by the previous government, ‘ Homelessness brings misery and uncertainty to individuals and families. But it is also negative for society, leading to additional public service expenditure across government.’ [4]

8.2 It has been estimated that the annual average cost to a local authority per individual sleeping rough is £8,605. [5] The costs of rough sleeping also accrue to many other parts of the public sector, including the Ministry of Justice, the Department of Work and Pensions and the NHS.

8.3 Supported housing is a vital service for preventing homelessness among already vulnerable groups, and for ending the devastating cycle of repeat homelessness by promoting a sustained recovery. If services are forced to close because they are no longer financially viable, the long term cost to the government will outweigh the housing benefit savings achieved by reducing rents.

September 2015

[1] St Mungo’s Broadway (2015) Client Needs Survey

[2] National Audit Office (2014) The Impact of Funding Reductions on Local Authorities http://www.nao.org.uk/wp-content/uploads/2014/11/Impact-of-funding-reductions-on-local-authorities.pdf

[3] Homeless Link (2015) Single homelessness support in England: Annual Review 2015 http://www.homeless.org.uk/facts/our-research/annual-review-of-single-homelessness-support-in-england

[4] Department for Communities and Local Government (2012) Making Every Contact Count: A joint approach to preventing homelessness https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/7597/2200459.pdf

[5] New Economy (2015) Unit Cost Database http://neweconomymanchester.com/stories/832-unit_cost_database

Prepared 16th September 2015