Making the financial case for Housing First
Blog posted by: Jennifer Harris, Tuesday, 26 March 2019.
New research commissioned by Homeless Link, The cost effectiveness of Housing First in England, shows that Housing First not only ends homelessness for some of the most disadvantaged people in our society, but it does so in a cost-effective way.
Housing First is a breakthrough intervention for people with multiple and complex needs and long-term experiences of homelessness for whom contact with services has previously been unsuccessful.
As part of the Housing First England project, Homeless Link commissioned Nicholas Pleace and Joanne Bretherton at York University to explore the cost effectiveness of Housing First in England. Responses from existing Housing First services, local authorities, and people using Housing First, show that Housing First can cost less than other types of homelessness services offering high support to people with multiple and complex needs, and can also save money for other services including within the NHS and the criminal justice system.
Comparisons to other homelessness services
Analysis of commissioning data from local authorities, shows that support costs are generally higher for other forms of homelessness services. They show that Housing First services tend to reduce support over time, as the needs of people using Housing First are addressed. Services reported that the level of support someone received during the first month, was on average, twice the level someone would be receiving after 12 months. However, every person using Housing First is different and services must be designed to respond to these differences. Some people may always require intensive support, and others may need high levels of support at certain times in their lives when crises arise.
The evidence suggests that Housing First may well be more cost effective than some other services on a day to day basis and is significantly cheaper over the course of one year. However, it is important to note that due to the severity and complexity of people’s needs, Housing First support is designed to be provided on a long-term and ongoing basis, whereas other services are generally intended to be shorter-term. Over time the differences in costs are therefore reduced.
Housing First is not a cheap option, and not necessarily going to save significant amounts of money, but the research shows that it certainly is cost effective, as it represents good value for money for the public purse because it stops long-term and recurrent homelessness.
Cost offsets for other services
Cost offsets centre on what has been referred to as the 'million-dollar Murray' problem in the United States. This refers to a situation in which someone with high and complex needs cannot get access to the right sort of support to help them exit homelessness, so that they instead become a "frequent flyer" of other services – including emergency health services, emergency accommodation and/or supported housing, or have repeated and expensive contact with the criminal justice system. This research shows that by ending this form of homelessness, Housing First can potentially address the “frequent flyer” aspect and save money for other services. The greatest potential for cost offset seems to be in reducing “frequent flyer” contact with other homelessness services, and in significantly reducing costs with the criminal justice system. The report also identifies potential for improving costs and outcomes for the NHS as people are supported to have improved contact with health services, rather than only being treated when in crisis via expensive emergency interventions. The ‘million-dollar Murray’ argument is as strong here as in the USA.
While the cost effectiveness of Housing First is an important consideration, our ultimate concern should be if it ends homelessness and improves the quality of lives for people with complex needs and experiences of homelessness. And international evidence tells us that it does just that.
This is why we are backing the use of Housing First across England, delivered in line with the principles, as part of a wider range of housing interventions underpinned by excellent housing options and prevention services. Increasing Housing First will require investment in housing, long-term funding for support and buy-in from across Government departments.
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