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Supported housing needs to be exempt from the housing benefit cap in order to protect the elderly, ex-homeless, people fleeing domestic violence, ex-offenders, and people with learning disabilities or mental health problems, councils urged yesterday.

Government has already announced the cap will come into force for social housing from April 2018 but is likely to confirm in July, following a review, whether this will also apply to supported accommodation.

The LGA, which represents more than 370 councils, is warning that some of the most vulnerable and disadvantaged groups in society most in need of this type of housing won't have enough money to cover the higher rental costs needed to run supported accommodation, which incurs higher maintenance costs and investment than general needs housing.

It would mean councils, where housing and social care services and budgets are already under enormous strain, being faced with a scramble to find vulnerable tenants suitable accommodation and having to meet any shortfall in costs.

This could lead to some people being forced to remain in hospital, due to a lack of homes, which would seriously undermine efforts to move people into the community and heap further pressure on the NHS.

The LGA is also warning many supported housing schemes could be forced to close as a result of the lost revenue, if the cap was introduced, leading to a shortage of available homes.

Councils fear many new supported housing developments needed to cope with the increase in demand may never get built if the cap was applied.

More than 9,000 supported housing units previously expected to be built may not go ahead – which equates to 96 per cent of all developments within the sector, according to the National Housing Federation.

An estimated 156,000 units of existing supported and sheltered housing are also at risk of closure – 41 per cent of all existing schemes.

LGA Community Wellbeing spokeswoman, Cllr Izzi Seccombe, said:

"Councils have real concerns over the risk to vulnerable residents if the Government goes ahead with its original proposals to apply the Local Housing Allowance cap to supported accommodation.

"We fear that due to the current uncertainty in the market, many supported housing schemes are not being built, and existing places may be forced to close, leaving new tenants with nowhere to live. This will heap huge pressures onto councils who are already struggling to cope with and fund demand for housing and social care.

"We urge the Government to listen to our call and exempt supported housing from the cap, and to work with us to look at alternative ways of managing this cost.

"It is vital that we ensure we continue to meet the needs of some of the most vulnerable people in our society, and that they live in homes that are fit for purpose."

Notes to editors

1. Joint Briefing to MPs and Peers re Social Housing and LHA by Housing and Support Alliance www.housingandsupport.org.uk/jointbriefingtompsandpeersresocialhousingandlha  
2. Government has announced that a cap to the Local Housing Allowance (LHA), also referred to as Housing Benefit, will be applied to social housing settings. The LHA cap applies to new applicants to social housing settings from April 2016, to come into force from April 2018.  The application of this cap to supported and exempt accommodation has not been confirmed by Government. A decision was due in April 2016, but has been delayed for a year, until April 2017, while the DWP considers a DCLG-led review of supported accommodation. We understand the intention is to finalise and make public the results of the review in July 2016.

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