New report from Salvation Army says proposed supported housing funding reform could threaten future of service for people with experience of homelessness

Independent research commissioned by The Salvation Army into the future of its homelessness services under a proposed government reform has revealed an uncertain outlook. The church and charity has found that the majority of residents living in its supported housing might not be guaranteed sufficient financial support, which could have a detrimental impact on how The Salvation Army supports people who are homeless.

At present, under the current funding system, a vulnerable person experiencing homelessness can claim the required rent to stay in a Salvation Army centre through an enhanced level of housing benefit. This enables the charity to offer what they term ‘transitional’ accommodation based on a person's needs, meaning that individuals are fully supported in their move from homelessness into sustainable, independent housing. Our services include vital additional features, such as enhanced security and maintenance measures, which are essential to ensuring that vulnerable residents are accommodated safely and securely.

By contrast, the Government’s proposed reform – if implemented as planned in April 2019 – means that a person would no longer have guaranteed access to funding to help meet their rental costs in full.

According to the new research, completed by independent consultant, Frontier Economics, this may mean that the future of over 90 per cent of The Salvation Army’s Lifehouses (supported housing for people experiencing homelessness) could be placed at risk.

With more than 60 Lifehouses across Great Britain, The Salvation Army wants to secure the future support for the 6,000 people it helps through its supported housing services each year. It is calling on the Government to delay the introduction of any new funding system until April 2022. This delay will provide a much needed chance to review the current model to ensure that a more sustainable solution can be found, including a new funding mechanism, which accurately reflects the true costs of safe and secure supported housing.  

Mitch Menagh, Territorial Director of The Salvation Army’s Homelessness Services Unit, said:

“Alongside many providers of supported housing, we became increasingly concerned about the proposed changes to funding. It was apparent that our Lifehouses could come under significant threat so we commissioned independent research to analyse the impact these changes could have on our supported housing services and, most importantly, on the people we support. We found evidence that the new system would place the financial viability of the vast majority of our supported housing services at immediate risk, jeopardising the homes of thousands of vulnerable people.”

One of the main findings from Frontier Economics’ analysis, is that under the Government’s proposed reform, residents in The Salvation Army’s supported housing would require an average ‘top up’ of around £78 per person per week for The Salvation Army to continue running its services in the same way as it does today. However, because the Government is proposing to base the new funding system on the value of local private rented sector properties, rather than what it actually costs to provide supported housing to vulnerable residents, the level of ‘top up’ required by residents varies from area to area. For example, the amount of ‘top up’ required for residents to continue meeting their full rental costs reaches £128 per person per week in the North West, whilst residents in London, where property values are high, would require little or no ‘top up’ at all.  

While the possibility of ‘top up’ funding is included in the Government’s proposed reform to cover these rentals, it will be administered by local authorities on a discretionary basis. As a result, there can be no guarantee that The Salvation Army’s residents will receive access to it in every case, as local authorities continue their efforts to stretch limited resources. With no guaranteed access to ‘top up’ funding to cover any shortfall in rental costs, residents in over 90 per cent of Lifehouses would be unable to afford their rental costs, which in turn would jeopardise the financial viability of the church and charity’s supported housing services.

Mitch continued: “Sadly we cannot operate our service on the basis of discretionary ‘top up’ funding, which offers our residents very little financial security. This change in funding would mean that we cannot effectively budget for the future and it also means that our service users would not be guaranteed the support they need for what are often extremely complex needs.

“In looking to complete the roll out of Universal Credit by April 2022, The Salvation Army understands the Government’s desire to implement a compatible funding system for supported housing. We appreciate that in its current format, Universal Credit poses particular problems for supported housing services.   

“Yet, despite these difficulties, The Salvation Army believes that if the Government is serious about providing security and stability to vulnerable residents in all forms of supported housing, including those in short term, transitional services, that it offers them the opportunity to continue claiming help with their rental costs through the social security system.”

Mitch makes clear: “At present, our residents are secure in the knowledge that they are entitled to meet their rent costs in full through the social security system. This offers a vital foundation from which they can begin to rebuild their lives and achieve their wider aims and ambitions. As part of any new funding system, we would very much like to see the Government maintain this level of stability for our residents, who will have often experienced chaotic lives prior to their stays with us.”   

As part of a wider system of preventative services, supported housing plays a vital role in supporting vulnerable people who would otherwise be forced to rely on more expensive forms of public service.

As supported housing does not operate in isolation, The Salvation Army is particularly concerned about the proposed reform’s knock-on impact to other local and national services, which are already struggling to cope with present levels of demand, including those provided by the NHS.

Mitch concludes: “In the long term, if the number of people experiencing homelessness continues to rise, but we are required to review the financial viability of our supported housing services, with the risk of closure a very real possibility in certain areas, communities could see increased levels of homelessness.

“Vulnerable people could also end up relying almost exclusively on things like accident and emergency, which we know is one of the most expensive forms of intervention. It will also take a toll on other services provided by local authorities, which are already struggling to deal not only with current levels of demand under stringent funding pressures, but also the increasing complexity of needs amongst those presenting there. Supported housing is one part of a much wider system and we should not forget that.

“Given these wider risks to the support system as whole, we ask the Government to put any new funding model through a rigorous trial period to ensure that it will work for everyone who is required to use it, with any weaknesses identified and rectified. It is also vital that the Government introduces transitional protection to ensure that nobody living in supported housing at the time the new system is introduced loses out.”