HFU0010

Written evidence submitted by Wales Strategic Migration Partnership

Wales Strategic Migration Partnership

Established in 2001, Wales Strategic Migration Partnership (WSMP) is funded by the Home Office and the Department for Levelling Up, Housing and Communities, and works with partners in the statutory, voluntary private and community sectors to provide strategic leadership, advisory and coordination function on migration in Wales.

The Partnership’s role is to:

  1. Facilitate collaboration and debate among UK, devolved and local government and public services, voluntary and private sector, and all partners with an interest in migration, in support of a strategic approach.
     
  2. Contribute to the development and implementation of national, devolved, and local migration policy, resolving issues and sharing best practice.
     
  3. Assist in the delivery of services that meet asylum seekers, refugees and migrants’ needs across Wales.
     
  4. Act as a conduit for two-way information flow between the Home Office and other government departments and national (UK and Wales) partners.

The WSMP is hosted by the Welsh Local Government Association (WLGA) to reflect the Partnership’s All-Wales role around migration, and to help foster closer working with public services and the 22 councils in Wales, linking in with local government’s political structures and local priorities.

Purpose

  1. This paper was produced as part of the Call for Evidence by Public Accounts Committee for inquiry into Homes for Ukraine (HFU) following the publication of a report by the National Audit Office (NAO) on the scheme.[1] In line with the committee’s enquiry, this report highlights the initial response and set-up in Wales, funding provided to the scheme, challenges and future risks evidenced by a summary of findings from a survey on Private Rented Sector (PRS) move-on offers and tariff usage by local authorities (LAs) conducted by the WSMP. This report reflects the current position of HFU, and challenges faced by LAs in Wales.

Homes for Ukraine initial response and first year in Wales

  1. All 22 LAs answered the call and became involved in supporting arrivals from Ukraine to Wales. Following the UK Government announcement of the HFU scheme, LAs began having conversations and preparing to operationalise the scheme, with some of the very first arrivals coming to Wales. The subsequent announcement from Welsh Government of the “super sponsor” scheme added another layer of complexity but was met with an overall support to welcome more people fleeing the war in Ukraine.
     
  2. A multi-agency partnership was established, meeting under the “Ukraine LA Response Group”, to look at the delivery of HFU as a ‘Team Wales’ approach, where all LAs, Welsh Government, Health Boards, other public and voluntary sector come together and work jointly to solve any arising challenges and share best practice developed by individual organisations.
     
  3. In addition to the challenges that all LAs across UK were experiencing, LAs in Wales began their work with Welsh Government, WLGA and WSMP on Welcome Centre accommodation sites for those under the “super sponsorship” scheme and Arrival Hubs at key transport sites (ports, airports, major train, and bus stations) to support arriving Ukrainians in reaching their hosted accommodation. This work was efficiently managed through the already established multi-agency partnership work undertaken for HFU as a whole.[2]
     
  4. In the first year (March 2022 to March 2023) of the scheme, Wales has supported a total of 6,592 Ukrainian Citizens [3] arriving in the country and received a total of £63.7 million [4] to support Ukrainians with from UK Government through the following allocations: Q1 – £21.3 million,[5] Q2 - £30.6 million,[6] Q3 - £7 million,[7] Q4 - £ 4.8 million.[8]
     
  5. This funding allocation allowed LAs in Wales to develop a robust wraparound support service consisting of ESOL, employability, host, and move-on support. Ukrainian citizens in Welcome Centres were able to find suitable longer-term accommodation in PRS, hosted accommodation or social housing.
     
  6. Overall, the initial set-up and delivery of the HFU scheme in Wales has been successful. The approach taken by Welsh Government, WLGA, WSMP, Local Authorities and other public and third sector partners allowed for Ukrainian citizens to settle into their new lives in Wales. The sufficient level of funding from  UK Government was a key component in the creation of a robust service.

Current situation in Wales

  1. In Wales, 7,170 individuals arrived under HFU up until 17 October 2023, with 3,924 people sponsored by individuals and 3,246 people sponsored by Welsh Government under their super sponsor scheme.[9] Welsh Government is maintaining its course of Initial Accommodation closures with the continued support from LAs across Wales with moving-on Ukrainian citizens to suitable longer-term accommodation. Across Wales there are nine sites left, housing approx. 320 individuals.
     
  2. The UK Government has not provided any clarity on any funding for the third year of the scheme, continuation of “thank you payments” beyond 24 months or extensions to the three Ukraine visa schemes. The WLGA and WSMP together with Welsh Government continue their lobbying efforts and urge UK Government to announce their intentions towards scheme as soon as possible, to allow ample time and opportunity for LAs to plan the next stage of scheme delivery.

 

  1. To better inform UK Government of the impact that lack of year two integration tariff generated and the current position in Wales, WSMP designed a survey in partnership with Welsh Government. The survey focused on asking the LAs in Wales on the existing offers of move-on to PRS they offer; how they are funding these; how they coped with no year two integration tariff and how the Ukraine response influenced the pressures on housing and homelessness provisions.

Challenges in Wales - Summary of Homes for Ukraine: PRS offers, tariff and support survey.

  1. The survey was open to responses from LAs between 20 September 2023 and 27 September 2023 to capture the picture in Wales and better inform UK Government about our devolved needs. All LAs were invited to participate and share their views, with 17 responses received. Subsequently, seven LAs were interviewed to provide further and more detailed account of their experiences.
     
  2. The review found that LAs are predominantly supporting Ukrainian citizens with a deposit, rent in advance and furniture, with eight LAs providing an additional rental top-up, to combat the pressures caused by the housing crisis coupled with low LHA rate against the housing current market.[10]
     
  3. The full report highlights that whilst additional funding has been provided by Welsh Government in the forms of “Move-on Grant” and “Discretionary Grant” to support LAs, they continue to use a sizeable portion of the surplus built up from the general tariff to sustain current level of service. Most LAs in Wales budgeted their tariffs beyond year one of funding, thus it had limited impact in year two as LAs were able to push their budgets, however the same cannot be said for year three where LAs report that they will have to consider significant reductions if no substantial additional funding is provided from UK Government.[11] The NAO investigation reports similar findings across other parts of the country where LAs chose to maintain a reserve their funding tariff. [12]
     
  4. The survey and interviews together highlight a collective concern amongst LAs in Wales that without substantial funding provision from UK Government, LAs will be forced to reduce their move-on offer and support, thus placing more Ukrainian families at risk of homelessness.[13] The funding from Department for Levelling Up, Housing and Communities needs to be reflective of the housing pressures that local governments are experiencing.[14]
     
  5. Additionally, UK Government must consider an extension and uplift of the “thank you payments” at £500 per month. Otherwise, LAs reported that they will face an influx of homelessness presentations, generated by a mass exodus of hosts.[15] This is a demand which they will not be able to meet.
     
  6. Overall, 13 LAs reported that the HFU scheme has led to an increase in pressures on their availability of temporary accommodation, as they had to place Ukrainian citizens in there due to hosting breakdowns.[16] The investigation reveals further that the scheme has put additional pressures on availability of accommodation in the local areas, and LAs have to actively try to mitigate the pressures created by the competitive housing market. [17]
     
  7. The subsequent interviews with LAs, support the findings gathered by the survey. LAs are under constant pressure to secure move-on accommodation for Ukrainians within limited timeframes and they are concerned about the future and effective delivery of the scheme caused by the uncertainty of the funding, ‘thank you payments,’ and extensions to visas.[18] Additionally, the lack of increase to the Local Housing Allowance (LHA) rate is putting additional pressures, whereby LAs have no choice but to use year one general tariff to top-up rents. This will have an impact on the medium- and long-term housing landscape in Wales, where we will see an increase in homelessness presentations, as the top-ups end.[19]

Recommendations

  1. The Public Accounts Committee members are requested to:

18.1.                   Consider the contents of this report.

18.2.                   Seek clarification from UK Government regarding funding for year three of Homes for Ukraine scheme and encourage the UK Government to consider a substantial funding increase from year two funding. (Para 13, 14)

18.3.                   Encourage the UK Government to extend the ‘thank you payments’ beyond 24 months and increase them to £500 regardless of how long the Ukrainian has been in the UK. (Para 15)

18.4.                   Seek clarification from UK Government on their intentions to extend the Ukraine visa schemes. (Para 17)

18.5.                   Escalate the pressures caused by Local Housing Allowance rates and request that UK Government consider a review of said rates to reflect current housing pressures. (Para 12, 17)

 

NB: This report is pending final approval due to time constraints. Final contents may change.

Annex 1:

Homes for Ukraine: PRS offers, tariff and support provided by Welsh Councils – Summary

 

Background

  1. As part of policy and financial planning for 2024/25 Welsh Government and Wales Strategic Migration Partnership (WSMP) continue to press with UK Government the need for clarity in terms of the Ukraine Sponsorship Scheme: Homes for Ukraine. As part of this UK Government has asked us to draw together a high-level financial needs assessment to enable them to consider our devolved needs. They have asked for information about how the Ukraine scheme has impacted on homelessness and how the funding provided has helped to mitigate and limit this. The questionnaire asked the Local Authorities (LAs) a range of questions about the following areas:
  1. Due to constrained timeline and necessity to feedback to UK Government as soon as possible, LAs were given a week to complete the survey, with an e-mail sent on 20 September 2023 outlining the ask.

Results

Supporting Move on to Longer Term Accommodation (PRS Offer)

  1.                                                               17 out of 22 LAs have completed the survey, and no questions have been missed or incomplete. The questionnaire found that LAs support move-on to longer term accommodation via three elements: Bond/Deposit, rent in advance and furniture (Figure 1) with 47% of LAs offering this to Ukrainian citizens wishing to move across UK, whilst the rest offer a mix of in county and support across Wales.
     
  2.                                                               8 out of the 17 LAs (Figure 1) have opted to support move-on into longer term accommodation with rental top-up, to address the high rental prices and low Local Housing Allowance (LHA) in their areas: “Acute housing pressures locally as felt elsewhere in Wales- we have limited PRS and social housing stock in the area, LHA rate is out of date, and consequent issues of affordability, demand pushing up rents in PRS creating additional pressures on limited stock.”.

 

A graph with different colored bars Description automatically generated(Figure 1)

  1.                                                               A screenshot of a question Description automatically generatedMost LAs use a combination of Move-on Grant, General Tariff, or both to support and sustain their offers to support access to longer term accommodation (Figure 2). Whilst 15 local authorities are using their move-on grant to support Ukrainian citizens into longer term accommodation, it is imperative to consider the high number that continues to use the General Tariff in conjunction, particularly going into the financial year 2024/25. This is because, General Tariff funding is broadly unrestricted and used to fund staff. An increase in the move-on grant would ensure that LAs are able to sustain their support teams longer.

(Figure 2)

  1.                                                               Regarding landlord incentives, eight LAs advised that they do not have one, with others providing a mix of responses with most breaking down into following categories:
  1.                                                               All 17 LAs advised that they continue to provide support to Ukrainian citizens which moved on to longer term accommodation. The support levels vary in length and frequency, but the following are offered:

The Tariff

  1.                                                               In terms of the tariff and changes to service delivery models, it is evident that LAs budgeted beyond Year 1.

“We continue to offer the same level of support because of careful budgeting.”

“We didn't change it we continue to provide the same level of support, as the budgets were forecasted a year ahead, to enable the team to be in place for 18 months.”

  1.                                                               With the reduction in Year 1 tariff for new arrivals having little to no impact on the support offered to new arrivals as “guests still require the same level of support irrespective of which year they arrived.”
     
  2.                                                          However, the lack of Year 2 tariff pushes Local Authorities to budget further, with some having to reduce workforce, and continue to use reserves acquired in Year 1 to finance their teams beyond.

“We used WG funding and some year 1 funding”.

“It’s likely that we’ll start a restructure in the New Year.”

“Budget appropriately, reduce workforce, seek assurances from citizens that they will meet the rent shortfall within the twelve months by action plans.”
 

  1.                                                          Further reductions are expected if no additional funding is provided, with some LAs, looking to restructure their teams as early as January 2024 “It’s likely that we’ll start a restructure in the New Year.”. Figure 3 shows that 76% respondents find “move on funding” is the most critical aspect for Year 3 with others mentioning benefits and thank you payments.

A graph with a pie chart Description automatically generated (Figure 3)

  1.                                                          Local Authorities which currently have or previously had Initial Accommodation, responded that the wrap around tariff was used to support:
  1.                                                          Local authorities highlighted that a stop in this type of funding would mean that they are unable to continue to sustain and offer the level of provision currently provided.

“Staff funding, spend to save and furniture. To remove this funding would mean that the support provided to them would be critically reduced. it would also result in the families having to repay the spend to save and furniture offered to them, potentially resulting in sever financial difficulty or homelessness.”

“This funding was to be significantly reduced or stopped this would have a massive impact on the support we are able to provide guests within the community.”

“Support would be a lot less if funding were to be reduced. Support is essential during this difficult time.”

Host Arrangements and “thank you payments.”

  1.                                                          Overall, all respondents feel that an increase in “thank you payment” has had a positive impact in their area. Two LAs chose to increase the payment further, to £600 per month from their own tariff funds. Whilst there is a mixed response that the increase has helped to attract more hosts, there is a strong feeling that the increase helped to sustain existing hosting arrangements and prevent breakdowns.

“We have not seen an increased number of hosts, but it may have kept the ones we have.”

“Yes, very beneficial - hosts have been willing to host for extended periods.”

“Increasing the thank you payment has allowed guests to remain with their sponsors for longer. The increase in the cost of living has had a massive impact on everyone and the additional £150 has allowed sponsors/host to continue their support. The increase has attracted a few new sponsors.”

  1.                                                          A cessation or reduction of host payments would have a major impact on Local Authorities, with majority stating they would see an increase in hosts withdrawing from the scheme, thus increasing the housing pressures on there are with more accommodation required at short notice.

“Increase in presentations of citizens at risk of homelessness.”

“We could lose hosts, and create additional unwelcome additional housing pressures/homelessness, and uncertainty for our guests.”

“Hosts would not continue hosting, this would then lead to more influx of people trying to source PRS or made homeless, no other option than for them to enter into temporary accommodation. This put immense pressures on the housing teams and homelessness. There would also be no way to encourage more hosts to come onboard.”

Temporary Accommodation and homelessness

  1.                                                          In terms of Temporary Accommodation (TA), only four LAs reported that they did not have to place Ukrainians in temporary accommodation, with 13 reporting a trend of increased pressures on their TA provisions. Whilst some LAs were able to limit the number of families placed in TA, there are concerns that over time because of the housing challenges, the need to house Ukrainian citizens in TA.

“Yes, our Homeless team is under massive pressure due to local families, lack of housing in general, low LHA rate, impact of rental homes Act plus resettlement schemes. There is a waiting list for TA.”

“We have had several breakdowns early on in the scheme, but this has lessened over time as we have been able to arrange re-hosting. This is likely to be a problem again especially for families who cannot afford PRS. We have had about 12 families who needed TA over the period”.

  1.                                                          All LAs responded that there is a pressure on availability of accommodation in their area, and they are trying to mitigate the impact of it. Seven local authorities were able to mitigate this by offering above market rates for PRS, employing additional staff with housing expertise, building relationships with local landlords and looking at placements out of county. The main challenges are around the availability of affordable housing stock, inflated rental prices, outdated LHA rate and concerns and Ukrainian citizen’s lack of financial history in UK.

“We have been unable to place people appropriately and are now looking at placing people out of county. We have not been able to overcome this pressure.”

“We are under constant pressure due to the lack of accommodation and the lack of affordable accommodation. LHA rates are far lower than actual rental rates (almost half in most cases). This needs to change.”

Follow-up interviews with Local Authorities

  1.                                                          Following the survey, a representative range of seven LAs across Wales were selected to capture both rural and urban feedback in more detail.
     
  2.                                                          The interviewed LAs expressed their collective concern around the impact on the council services, in particular housing services, if the funding for Ukraine Sponsorship Scheme were to cease or be further reduced. All interviewed LAs agreed that further funding to support move-on was crucial to facilitate longer term resettlement of Ukrainian citizens. However, caution must be exercised when utilising the move-on fund, as incentives like rental top-ups, whilst working in the interim to prevent homelessness and support initial move-on, will not be fiscally sustainable in the medium-term and long-term for LAs when the funding stops, which could result in a deferred impact on council services.
     
  3.                                                          The key change proposed is to review and increase Local Housing Allowance (LHA) rate to reflect the current housing market. A further suggestion presented was to bring the “shared room rate” in-line with the “one bedroom rate”, in a similar fashion to how the “thank you payments” are topped up by Welsh Government, as a cost saving measure on the bill currently incurred by procurement of bed and breakfast provisions for temporary accommodation.
     
  4.                                                          When faced with the possibility of “thank you payments” not being extended beyond 24 months, interviewed LAs expressed grave concern around the impact this would have on their strained housing services, with hundreds of Ukrainians potentially facing homelessness and stays in temporary accommodation. In some cases, LAs stated that they would not be able to cope with the potential influx if hosting stopped with no viable alternative.
     
  5.                                                          Discussing viable alternatives, like changing hosting arrangements into lodger agreements, there was a mixed response about the prospect of this in individual Local Authorities. Whilst few LAs were keen to work with their hosts and negotiate a change to lodgers’ agreements, others were more cautious and expressed that their hosting cohort would be less willing to change over to this type of agreements. There have been questions about the viability of lodgers’ agreements as a solution, as these agreements usually refer to one bedroom in the property, with some local authorities troubled by overcrowding, as under the hosting arrangements it is permissible for parent and child to share a bedroom.
     
  6.                                                          Others stated that lodgers’ agreements would not be viable for them, as their hosting consists of a large proportion of empty second homes, which means that their hosts would be required to become landlords. As becoming a landlord is more costly and time intensive not all hosts want to commit to this. A proposal was made to consider a fee reduction or covering the costs of registration with Rent Smart Wales for hosts and support provided by LAs to register and go through the process of becoming a landlord. This could be tied in with an agreement that as part of the process host agrees to rent the property at a reasonable price (LHA rate + 20% or in line with thank you payment rate) for a minimum of 6 or 12 months to Ukrainian citizen.
     
  7.                                                          The interviewed rural local authorities have also expressed concerns around schooling and transport as a more acute issue specific to them. Most Ukrainian families when they live rurally, only have one vehicle and struggle to meet their work commitments and childcare if there is no school bus transport in their area. A further point has been made around accessibility of the resettlement and other services when living rurally, and even when support staff is able to meet individuals in their property, it is difficult to conduct multiple rural visits in the same day, in particular if the issues require urgent support. This commits rural areas to invest into more staff to effectively support Ukrainian families in their area.
     
  8.                                                          Regarding future funding, most LAs have budgeted and planned their “Ukraine Teams” in-line with the three-year visas issued by the Home Office. Any future considerations for visa extensions should work in tandem with further funding, given the fact that whilst some Ukrainians plan to settle in Wales and UK long-term others want to return to Ukraine when the war is over, and therefore are reluctant to commit to any longer-term arrangements regarding their housing and settlement. This means that they will continue to rely on a certain level of support from their respective LAs throughout the duration of their visa.
     
  9.                                                          Local Authorities stated that in order to meet the current support demand, they are relying on the general tariff claimed in Year 1 of the scheme, topped-up by the move-on and discretionary grants. However, these claims are mostly completed, with one authority reporting that currently are able left with 17 Year 1 claims of the tariff whilst supporting 347 individuals. Another LA reported that out of 270 citizens the tariff has ended for 213. This results in ongoing concerns about the move-on offer that LAs are able to provide to Ukrainian citizens in the future, particularly if the funding for the scheme is limited. Local Authorities would be looking at reducing the offer significantly and reduction in their team size to facilitate and sustain their support.

 

Conclusion

  1. To conclude, it is evident that LAs in Wales are applying a wide range of offers to support Ukrainian citizens moving into longer term accommodation. However, this is slowed down by the housing crisis across the country, disparity between LHA rate and current market prices. A continued stream of funding, particularly for move-on is required to ensure that as few Ukrainian citizens are made at risk of homelessness or homeless. Whilst the move-on offer differs across each LA, it is evident that any funding reductions will impact these and make move-on more challenging and difficult.
     
  2. Subsequent interviews with LAs across Wales show that whilst they are managing with the current funding levels, this is mostly because of the savings of the Year 1 general tariff. To sustain an effective and continued service for Ukrainian citizens they need a significant funding package to ensure successful integration into local communities. With the current pressures on the housing market across Wales and UK, it is imperative that UK Government considers and approves an extension of the “thank you payments” as Local Authorities will not cope with an influx of homelessness presentations, unless a viable alternative to hosting is introduced and implemented.

Recommendations

  1. Following the survey, the following is recommended to ensure successful delivery of the Homes for Ukraine Scheme:

1)     Continuation and extension of “thank you payments” beyond 24 months.

2)     No reduction in the “Thank you payments” rate of £500 per month.

3)     Further and significant financial commitment from HM Treasury for Year 3 of Homes for Ukraine to ensure Ukrainian citizens continue to settle in Wales. Funding should be focused particularly in areas of move-on and homelessness prevention.

4)     Review of Local Housing Allowance rates to bring them in-line with current rental market.

5)     Consideration by Welsh Government of the viability of “topping-up” the Shared Room Rate to allow singe-persons a more realistic chance at securing property. Similar to the current arrangements they offer with “thank you payments”.

6)     Exploration of the viability of lodgers’ agreements with hosts and thought given to subsidising the costs of Rent Smart Wales training for hosts interested in becoming landlords for their Ukrainian citizens.

7)     Continued support of LAs from Welsh Government with the level services they offer to Ukrainians.

8)     Consideration of acute and unique pressures Ukrainian citizens are experiencing in rural areas of Wales and actively working with these LAs on how to mitigate them.

November 2023

 

 

[1] Investigation into the Homes for Ukraine scheme (nao.org.uk)

[2] ‘The Welsh Government’s discussions with the WLGA and Welsh local authorities on the operation of the Ukraine settlement schemes’ business.senedd.wales/documents/s126234/Paper 2.html?CT=2

[3] Ukraine Sponsorship Scheme visa data as at 28 March 2023  Ukraine_sponsorship_scheme_-_visa_data_28_March_2023.ods (live.com)

[4] Sum of Quarter 1 to Quarter 4 tariff allocations for Wales from March 2022 to March 2023 issued by UK Government

[5] Annex A: Homes for Ukraine local authority funding allocations March to May 2022 (Wales) - GOV.UK (www.gov.uk)

[6] Annex A: Homes for Ukraine local authority funding allocations June to August 2022 (Wales) - GOV.UK (www.gov.uk)

[7] Annex A: Homes for Ukraine local authority funding allocations September to November 2022 (Wales) - GOV.UK (www.gov.uk)

[8] Annex A: Homes for Ukraine local authority funding allocations September to November 2022 (Wales) - GOV.UK (www.gov.uk)

[9] Ukraine_sponsorship_scheme_-_visa_data_17_October_2023.ods (live.com)

[10] Annex 1: ‘Supporting Move on to Longer Term Accommodation (PRS Offer)’

[11] Annex 1: ‘The Tariff’

[12] National Audit Office: Investigation into the Homes for Ukraine scheme Investigation into the Homes for Ukraine scheme (nao.org.uk) (para. 3.4, 4.2)

[13] Annex 1: ‘The Tariff’, ‘Host Arrangements and “thank you payments”.’, ‘Temporary Accommodation and homelessness’.

[14] National Audit Office: Investigation into the Homes for Ukraine scheme Investigation into the Homes for Ukraine scheme (nao.org.uk) (Para. 4.11 - 4.13, Figure 14)

[15] Annex 1: ‘Host Arrangements and “thank you payments.”’. Para. 15

[16] Annex 1: ‘Temporary Accommodation and homelessness’.

[17] Annex 1: ‘Temporary Accommodation and homelessness’. Para. 17

[18] Annex 1: ‘Follow-up interviews with Local Authorities’. Para. 25

[19] Annex 1: ‘Follow-up interviews with Local Authorities’. Para. 18 - 26