Keswick Close Extra Care stalled due to uncertainty around Local Housing Allowance cap

Keswick Close Extra Care scheme

Uncertainty around the Local Housing Allowance (LHA) cap, has stalled a scheme in Rochdale - Keswick Close Extra Care.

Housing associations providing vital supported, sheltered and extra care housing have had to slash plans to build new homes, down from 8,800 to 1,350 units, according to a new survey by the National Housing Federation.

This follows months of concern generated by Government plans to review the funding for these services, which the sector and leading parliamentarians believe will not work. A Green Paper, expected to detail the proposals, was due before the summer but has now been delayed until the end of autumn.

A total of 69 housing associations, which together deliver a third of supported and sheltered homes in England, responded to the survey. Supported housing provides a secure, safe place for the most vulnerable, a majority of whom are older people or people with long-term disabilities, saving the taxpayer around £3.5bn in NHS costs.

The Government’s indecision has left residents and housing associations with little certainty about their future income, and some boards have had to make difficult decisions.

Housing associations made a strong case for an alternative model that addresses concerns about how the money will be allocated and how long it will be available for. It was endorsed by a joint select committee of MPs, who recognised that the basis for the new system was not “a competent starting point” given it is based on the specific circumstances of the private rented market.

David Orr, Chief Executive at the National Housing Federation, said: “These findings really bring it home: changes to supported housing funding are stopping building for the most vulnerable. Housing associations know first-hand that the proposed funding model will not work – a view backed by a joint select committee – and yet the Government has failed to heed warnings.

“With social care in crisis, the role supported housing plays in alleviating pressures on the NHS is ever more important. These changes have not even come in yet and they have taken 7,000 homes for vulnerable people out of the pipeline.

“The proposed changes in funding bear no relation to the real cost of providing this type of housing. It is time the Government put supported housing on a secure and sustainable footing.”