Written evidence submitted by Empower Housing Association [EXA 031]
Introduction
Empower Housing Association specialise in providing housing for adults with disabilities enabling them to live within their community independently. We have been working together with families, Social Services, Care Providers and Commissioners, since 2003 providing housing in a geographical area from Scotland to Devon. Currently we have over 200 properties providing 450 forever homes in over 70 local authorities and have been a registered Housing Provider (Housing Association) since 14th July 2011.
Supported living enables people with disabilities to have a right to decide where and with whom they want to live, with the ongoing support they require to sustain that choice. Housing providers can discuss with tenants their wants and needs to assist with the selection of a suitably property within the desired geographic area close to local amenities to help promote independence. In our experience the tenants and their representatives can be involved in the specification of any adaptations required to assist them to live as independently as possible, and in doing so creating a bespoke home for their individual needs.
Most of our accommodation is provided by landlords who lease the properties to Empower. These landlords are in the main local investors, looking for both a return on their investment as well as recognising the philanthropic good these homes provide.
All our exempt accommodation is commissioned by Local Authority partners and as a result distinctly different from non-commissioned exempt accommodation. This distinction is paramount in exploring exempt accommodation provision. When commissioned all our properties and residents require Specialised Supported Housing (SSH).
What is the quality of exempt housing provision?
The standards of Exempt Accommodation differs greatly between providers. The properties provided by Empower Housing Association are of a high standard, with each home developed specifically for the individuals who will live there. The minimum standard required is set by the regulator for Social Housings Home Standard and all our properties exceed the Decent Homes Standard that is deemed to be the minimum required.
All our homes are maintained to a high standard, with a cyclical programme of works developed to ensure the standard is maintained. This can be challenging due to the needs and behaviours of some residents, however Empower has many years experience of working on an individual basis to ensure individual needs are met.
Is the current model of exempt accommodation financially viable, and does it represent value for money?
Specialised Supported Housing is and will continue to be ‘expensive’ compared to other social housing, driven by an increased need for services from the Housing Association, increased repair and management costs and investor returns. It is crucial to recognise by definition SSH funding does not have any Government funding within the model. It is a policy choice to not subsidise the capital requirements of homes, thus placing more pressure on revenue funding. The revenue funding is provided through exempt Housing benefit regime.
Treasury has a policy choice to make as to how to support the provision of homes to some of the most vulnerable in our society. The alternative for many of our tenants would be a care home. We believe this provides a sub-optimal home environment that limits individual choice and expression, reducing the quality of life for people.
Each individual Local Authority have their own interpretation when it comes to setting reasonable rents for exempt accommodation. Proposed rents are often compared to that of Private Landlords which are governed by what they can achieve in the local rental market. Total scheme costs including purchase price, development and on costs such as service charges dictate whether a property purchase and proposed rents will be accepted as reasonable under exempt accommodation rules.
Within the social housing sector, some lease based providers, many of which provide exempt accommodation have been subject to regulatory intervention. This intervention has highlighted a funding model that has developed since 2016 whereby institutional investors have been providing the capital to support the development of exempt accommodation. These institutional investors can require high returns for low risks, looking for a Housing Association to take on many of the risks associated with this type of accommodation. Some Housing Associations have nearly failed as a result of the inappropriate risk model.
With capital investment needed, investors in this market should be taking a more balanced approach to risk. The leases that Empower has I believe have a more appropriate share of the risk associated with this accommodation.
To conclude, is exempt accommodation financially viable – yes. The exempt Housing Benefit regime provide a mechanism to fund a high quality property coupled with a much higher level of services to the vulnerable client group.
Does it represent VFM – Yes. In many cases the alternative is a care home where costs would be significantly higher.
Are there significant geographical and regional differences in the provision and the problems of exempt accommodation?
Not that we experience. We operate in over 70 Local Authorities and although each Local Authority Housing Benefit department may apply the exempt accommodation rules slightly differently, our experience is the quality and standard of end product remains a high quality.
What is the proportion of exempt accommodation that is provided by registered compared to non-registered providers, and is an appropriate balance being struck?
Not something we know
What is the proportion of exempt accommodation provided by commissioned compared to non-commissioned providers, and is an appropriate balance being struck?
Not something we know
How does whether a provider is registered or non-registered, or commissioned or non-commissioned, impact the quality of provision?
Our direct experience is only with other Housing Associations. SSH is a service for highly vulnerable people and appropriate regulation as a protection against poor service or service providers, poor assets or poor management of assets we believe is a core foundation for an effective system of SSH provision.
As a Housing Association, you provide assurance to your tenants and partner agencies the exempt accommodation provided has been set up in the most compliant way. The Regulator of Social Housing ensures you are financially viable, properly governed and provide decent, well managed homes. Commissioned services are also regulated in a similar way.
A non-RSH regulated entity has no minimum standards of service, financial resilience or governance being offered. This may lead to corners being cut that affect the quality and standard of the homes provided and value for money.
How should exempt accommodation be provided and what should the service cost?
Exempt accommodation is a very individual thing. In our experience referrals usually come via Local Authority Commissioners/Social Services, who will have approached and discussed with proposed tenants/family members/representatives the options around suitable housing.
Information concerning exempt accommodation at this point will be provided to those who are eligible to live within a supported housing scheme, taking into consideration the levels of personal care and support they require is equivalent to the services or support which would be provided in a care home, for tenants for whom the only acceptable alternative would be a care home.
It is our view that providing a suitable home for all in need is a fundamental pilar of a modern society. Having SSH accommodation specifically excluded from any Government Grant drives the intervention of institutional investors. This takes exempt accommodation further away from mainstream social housing provision where quality standards are very well embedded.
As a result, exempt accommodation is provided by niche housing providers (some are Housing Associations) who tend to have small geographically diverse portfolio’s. Although the quality of accommodation can be excellent, this does put pressure on overheads that result in higher unit costs.
In our view the model for exempt accommodation housing providers could be improved by:
How should the regulatory oversight of exempt accommodation be organised?
We believe that all organisations providing SSH accommodation should be regulated entities, this will provide minimum standards that they would be expected to work within, and in turn offer a level of protection to some of the most vulnerable in society.
What should be the regulations governing exempt accommodation and how should those regulations be enforced?
The regulator for social housing regulatory standards are written to provide the standards for 99% of social housing within England. Exempt accommodation is a niche area and as such, some aspects of this regulatory regime should be regulated differently to general needs social housing.
For example, the Housing Regulators Governance and Financial viability standard require that Housing Associations have sufficient resilience to manage known and unknown risks. The typical model for SSH providers is for properties to be provided by landlords through leases and this means Associations cannot build up the resilience needed to meet the stringent stress testing expectations of the regulator. As a result an Association may be deemed non compliant and the home of the tenant placed at risk.
Provision of commissioned homes for vulnerable people is critical to the health and well being and quality of life for those individuals. Housing Associations are ideally placed to provide this accommodation, with high quality standards in a regulated environment. Government policy drives a lease based model as a result of zero capital funding for this type of project, however the regulatory standards dissuade the sector from getting involved.
Is there sufficient publicly available information about exempt accommodation?
No – this is an extremely complex area that is relied upon to fund the homes for some of the most vulnerable in society. Unless you are a specialist in the field there is confusion as to the definition of exempt accommodation, its purpose, value and funding.
This leads to mainstream providers of social housing shying away from providing this type of accommodation. We believe this complexity has led to the intervention of the capital markets and property developers to use this niche area to provide excessive returns to investors/developers.
Consequently, this has led to high profile regulatory intervention and the media focusing on market and participant failures. This has placed a stigma on specialised supported housing providers like Empower and a further reluctance for mainstream social housing provider participation.
January 2022