Latest Public Sector News

10.03.17

Manchester extra care housing schemes at risk due to benefit changes

Social care housing developments in Manchester are at risk due to a shortfall within financial models created by the uncertainty of the government’s proposed change to housing benefit for supported housing, a city council report has outlined.

The report, published on 8 March 2017, warned that developments that could provide housing for those with social care needs may be at risk due to changes to funding arrangements to pay for the developments of the initiatives.

It went on to recommend that Manchester City Council (MCC) be approved as commissioner of supported housing services, to provide a specified capital subsidy, and where possible make available loan finance.

The report stated: “The uncertainty created by government proposed policy changes to rent and service charge restrictions from 2019 alongside the 1% rent reduction from 2017-18, has impacted upon registered provider (RP) business cases and created a risk to proceeding with the two schemes within HCA funding timescales.”

It was then recommended that: “To enable the schemes to be developed by the RPs within the timescales required to secure HCA funding, the potential for MCC to provide loan support and/or an additional injection of upfront capital investment is being examined.

“Any such support will be subject to claw back, should the governments proposed revenue pot devolved to the local authority enable the RP to set more realistic rent and service charge levels for the scheme.”

There were additional details in the council report about how planned savings from adult social care could be delivered through the implementation of Extra Care Housing.

It also outlined potential savings that could be delivered for the council through, “creating Extra Care Retirement Housing that provides accommodation in which older households can remain independent in their own homes with the provision of high-quality onsite care”.

It went on to explain that: “Funding will be identified through reducing the current expenditure on residential and nursing care, as well as people moving into extra care with an existing homecare package.

“The cost of care at four additional schemes would be estimated at £500,000 per scheme, £2m in total for new developments.

“Early indications from modelling work completed so far indicate that this would generate savings of £3.34m with a net saving of £1.34m for 2018-19 onwards. These savings are already in the financial benefits set out in the Manchester Locality Plan for the integration of health and social care.”

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