A small cut with a disproportionate impact

17 Nov 2015
by Neil Skinner

Today members of the House of Lords will debate the Welfare Reform & Work Bill.

It is extremely important to Framework and other smaller specialist housing associations because it threatens substantial cuts to our income and our ability to support vulnerable people.

That is why Framework Chief Executive Andrew Redfern has written to Peers to highlight his concerns. The text of his letter can be read below...  

In common with many charities and voluntary sector organisations across the land which support homeless and vulnerable people, Framework has concerns about the implications of the Welfare Reform & Work Bill for the people we support in the East Midlands.  

There is one particular aspect of the Bill which, if not addressed, will have serious and unintended consequences for vulnerable people – and for our public services. 

The Bill includes the proposal for a 1% cut in social housing rents in each of the next four years.  Mainstream housing associations will have a view on the implications for them: they may be better placed to absorb the impact of this cut than specialist, and generally smaller, associations like Framework which only deliver supported housing.  The latter have higher costs and lower margins.  

Such work used to be funded effectively by the excellent Supporting People programme: not only has that programme ceased to exist but that budget and its successors have been progressively and disproportionately reduced in the past five years.  

As a result of these changes, rental income has become an increasingly important component in Framework’s ability to provide help to the wide range of people we support across the East Midlands – men and women – including many young people and some who have left the armed services: we support them in tackling mental health problems, drug and alcohol issues and the consequences of offending histories, among many other things. 

Delivering the particular support which our service users need is staff-intensive: staff costs represent 70% of Framework’s turnover.  We are already working with the tightest possible margins, having responded to previous funding reductions and reduced contract values by reorganising services and reducing staffing and other costs.  We have reached the point where there is no longer room for manoeuvre and the proposed 1% per annum cut, at a time when more people are looking for help, will have a disproportionate effect on our ability to continue helping people in need. 

The voluntary sector is known to make a valuable contribution in helping people whose often difficult and enduring problems would otherwise become the responsibility of local authorities, the health community and other statutory bodies.  The proposed 1% cut in rents for each of the next four years would further reduce the funding available to address the challenging problems faced by vulnerable people and would also diminish the voluntary sector’s ability to make its unique contribution. 

As is well known, statutory services are themselves under the most extreme pressure and financial constraint: it would be preferable to avoid unintentionally increasing the burden on the NHS, the police, the criminal justice system and employment services (among many others) because voluntary sector providers are no longer able – or present – to do so.  

The remedy is contained in an amendment to the Welfare Reform & Work Bill put down during the Commons Committee Stage by Emily Thornberry, Debbie Abrahams and others to provide that the mandatory 1% annual reduction in social housing rents should not apply to ‘Specified Accommodation’.  It reads:                  

Clause 22, page 21, line 21, at end insert—

“(c)  the accommodation is specified accommodation, as defined in the Housing Benefit and Universal Credit (Supported Accommodation) (Amendment) Regulations 2014.” 

Member’s explanatory statement:

To provide that the mandatory 1% annual reduction in social housing rents will not apply to the tenants of “specified accommodation”. 

The Government has indicated that it might exempt specialised accommodation but the definition of this is far too narrow: the amendment above refers to specified accommodation and this is the exemption that is required.  The distinction between the two may appear to be a technical one but it is crucial to this debate and for the future of thousands of very vulnerable people.

Yours sincerely,

Andrew Redfern
Chief Executive


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