Theresa May announced this week that the Government will no longer proceed with a planned change to public funding for supported housing.

Public funding for supported housing is currently administered through housing benefit. However, a Government consultation in 2016 had proposed a new model, with funding instead based on Local Housing Allowance rates, which reflect local rentable values. Frontier Economics recently prepared a report for The Salvation Army investigating the Government’s proposals. The Salvation Army is one of the few national providers specialising in supported housing for people at risk of experiencing homelessness.

Frontier’s analysis finds that the proposed new approach to funding posed 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 providing 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 Government is no longer proceeding with the proposed change to funding based on Local Housing Allowance rates, and is due to announce more details on how it will proceed shortly. In yesterday’s Parliamentary debate, an Opposition Minister advised “the Government could do no better than to look at the suggestions … of the report written by Frontier Economics for The Salvation Army”.

Frontier Economics has advised public, private, and third-sector clients on housing policy.

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