Elderly and disabled in sheltered housing will still get housing benefit, say ministers

Housing benefit will be kept for older people, the disabled and others living in sheltered housing, ministers have confirmed.

The announcement signals the government has ditched plans to introduce a ‘sheltered rent’ or a cap on service charges in extra care schemes as well as proposals to give councils a new grant to fund short-term emergency accommodation.

Ministers said the government has "listened" to the views of sheltered housing providers and councils.

Housing minister Kit Malthouse MP said: “Protection of the most vulnerable has always been our primary concern, and following our consultation, the case for keeping supported housing in the welfare system became clear.”

Concerns over 'sheltered rent'

Sheltered housing can offer a home for those with mental ill-health, learning and physical disabilities and older people. Kit Malthouse's announcement follows a consultation with sheltered housing providers on proposals to consider new ways of funding it.

The Sheltered and Extra Care Housing consultation revealed many were concerned about whether ‘sheltered rent’ would be set at the right level. If set too high, it would have 'limited impact'; if too low it could mean a failure to cover operating costs and risk future supply.

The government stated: 'It was also apparent that our intention to regulate gross rent would be complex to deliver. Whilst rent is often set by formula, service charges are dictated by the actual cost of services which vary from scheme to scheme. Setting a consistent cap would be particularly challenging.'

Justin Tomlinson, minister for Family Support, Housing and Child Maintenance, said: “We value the expertise of stakeholders and have listened carefully to their concerns during the consultation. As a result we will continue to pay housing benefit for all supported housing –making sure safe homes are provided for those that need it most.”

Sector is 'looking more secure'

Trade association ARCO (Associated Retirement Community Operators), represents operators of housing-with-care developments – amounting to 350 retirement communities for more than 30,000 older people in Britain.

Responding to the Government’s decision not to introduce a sheltered rent or a cap on service charges in extra care schemes, Michael Voges executive director of ARCO said: “This is good news for the tens of thousands of older people who want to move to retirement communities and benefit from improved health, care, wellbeing and independence. It is also a sensible decision for all levels of Government and will help to deliver better value.

“The UK is a world leader in the provision of Retirement Communities for those with moderate means, often referred to as extra care. With a rapidly ageing population, there is huge demand for more of these schemes as they deliver great quality of life for residents and generate substantial savings for our health and social care systems. We are delighted that as a result of this decision the future of this part of our sector is looking more secure."

Kit Malthouse also announced he will work with providers, membership bodies and resident representatives over the next few months to develop “a robust oversight regime”. A review of housing-related support will be undertaken “to better understand how housing and support currently fit together”.

“The sector also recognised that our aim of improving the quality of homes must be addressed, and we look forward to now working with partners to make sure we have strong measures in place”, Mr Malthouse said.

One Housing provides 16,000 homes and cares for over 11,000 people across London and the South East to help people live independently. It has plans to build 3,500 more by 2020.

Richard Hill, group chief executive of One Housing said: “We are delighted that the government has announced that supported housing funding will remain in housing benefit. As one of the largest providers of supported housing in London and the South East, this announcement gives us certainty to continue to build and provide specialist housing for some of the most vulnerable people in society.

"We are looking forward to working with government in the coming months to develop policies that ensure the sector is delivering value for money and high-quality services for our residents.”