1. The new investment framework and supported housing Jake Eliot, Policy Officer SHiP Conference 2011 Friday 4 February

2. Summary The Spending Review and context Quick look at the new framework Issues for supported housing Localism Bill and tenure reform Discussion

3. A brave new world? Financial context: -cut the deficit -the new investment framework Ideological position: -social housing seen as stagnant -culture of dependency -Local leadership -tenancy and allocation reform -regulatory reform

4. Housing: NAHP 60% cash cut: -£4.5 billion (including existing commitments, mortgage rescue, empty homes, places of change and G&TSs) over next 4 years -‘flexibility’ to fill the capital hole -new ‘Affordable Rent’ tenure at up to 80% of market rent (on a proportion of re-lets and new build) in return for an agreement on new supply. CSR: The headlines 19% cut across departmental and capital budgets CLG: largest cut – departmental budget by 51%, capital spending by 74%

5. The new funding model Government argue a limited capital pot can provide 150,000 new affordable homes But... future supply is extremely sensitive, o proportion of re-lets at new tenure o market rent levels – LHA and housing benefit caps....New model will not generate capacity everywhere

6. Quick look at affordability in SE

7. Old model vs new model Social RentAffordable Rent Rents at c. 50% of market rentRents at up to 80% of market rent Grant at c. £80k unit (nationally)Grant as part of the wider offer Limited use of existing assets – disposals and conversions More active asset management strategies involving conversions of voids and disposals Lifetime tenanciesFixed term tenancies – with opportunity to extend

8. Level of flexibility? What about service charges? Where does the model work? What’s the ‘market rate’ for supported housing? In local relationships, who’s making the case for supported and specialist? Interaction with welfare reform? Will near market rents be affordable or create work disincentives? Some big questions about supported housing

9. How to deliver range of solutions and value for money for grant High risk of revenue model Challenge of timescales Key issues for development

10. The major stumbling block: rents and benefits Family sizeHousing needBenefits left for housing costs within £500 cap Couple with 4 children3b6p£129.95 Couple with 5 children4b7p£65.97 Rent risks – need confirmation of high level principle between CLG/DWP that is covered and not subject to further review after sign-off £500 p.w. (£26k p.a.) benefits cap for larger families as proposed by the Universal Credit If this cap remains it will limit the supply of larger homes, particularly in high value areas. HCA/CLG in discussion with DWP.

11. Certainty on benefits Enabling rents and service charges Sensible partner engagement Product flexibility Operational control for housing associations Radical reform needs real flexibility

12. Other potential solutions Non-grant development models Equity release through asset management Better or different investment partnerships? o Health or social services o Consortia with developing associations

13. Where do we go from here? End of Jan/early Feb - HCA publish prospectus Feb to end of March – bids invited from providers April to May – assessment of bids Early to mid June – ‘National mediation’ Mid June – HCA Board/Ministerial sign-off Late June – contracts signed.

14. Agreeing investment packages Need tight proposals for first eighteen months of programme Critical to have local authorities on board – particularly to deliver supported and specialist Know the risks of engaging…. ….and the risks of not engaging

15. Wait, did someone say ‘Localism’?

16. Flexible Tenancies and tenancy strategies Flexible tenancies of at least 2 years Limited succession rights Local Authorities not obliged to have open waiting lists Local authorities will have a strategic tenancy policies More tenant transfers outside allocation system to improve mobility

17. Jake Eliot Policy Officer 020 7067 1084 Jake.eliot@housing.org.uk www.housing.org.uk/careandsupport Keep in touch