The Salvation Army today published a report by Frontier Economics investigating the Government’s proposed changes to funding housing for those at risk of homelessness. Public funding for supported housing is currently administered through housing benefit. However, a Government consultation in 2016 proposed a new model, with funding instead based on Local Housing Allowance rates, which reflect local rentable values.
Frontier’s analysis finds that the proposed new approach to funding poses significant risks to the financial viability of The Salvation Army’s supported housing provision. Those at risk of homelessness often have complex needs, such as mental health conditions and addictions, which result in higher costs for the provision of supported housing than many other groups, but this is not reflected in the funding formula. As a result there is a risk that without additional support, fewer places would be available for people at risk of homelessness. A proper funding model would reflect the value delivered by the service, for example based on the size of the property and the services included in the property alongside having a roof overhead.
The Salvation Army is one of the few national providers specialising in supported housing for people at risk of experiencing homelessness. Such housing is vital to ensuring that people can address their immediate need for accommodation, as well any wider support needs they may have. It also has wider benefits because it reduces people sleeping on the streets, potentially entering the justice system or imposing other costs on the health and social care systems.
Frontier Economics has advised public, private, and third-sector clients on housing policy.
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