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LGA Response: Homelessness Prevention Grant – Technical Consultation, August 2022

The LGA are supportive of a revision to current funding in order to simplify and take into account current housing pressures, but have some concerns about the proposals suggested as they are not necessarily reflective of current strains on homelessness services and will have an extremely adverse effect on London in particular.


About the Local Government Association

The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross-party membership organisation, representing councils from England and Wales.

Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.

Summary

  •  ​​​The LGA are supportive of a revision to current funding in order to simplify and take into account current housing pressures, but have some concerns about the proposals suggested as they are not necessarily reflective of current strains on homelessness services and will have an extremely adverse effect on London in particular.
  • There are other elements which could be integrated into funding proposals which would encourage more innovative spending, such as more of a focus on stay put options and the inclusion of upstream preventions carried out by support services.
  • Local housing pressures should be taken into concern on a more accurate basis, particularly in areas where there is a lack of move on provision such as social housing or affordable private rented housing.
  • We are opposed to a punitive approach to missing H-CLIC data and would like to work more closely with government to look at what supportive measures could be put in place for councils who struggle to input full H-CLIC returns.
  • Although we are supportive of better data around how funding is spent, extra administrative burdens on councils may result in this becoming a burden on already limited resources.

Questions

  1. Do you agree with our proposal to combine the HRG and HRA uplift elements of the formula, using HRA uplift formula for £110m of the grant? (Yes – No – Indifferent - Not sure)

    No

     
  2. Do you agree with our proposal to apply an overall ACA in the £110m element of the formula? (Yes – No – Indifferent - Not sure)

    No

     
  3. Of the options presented to replace TAMF in the formula, which is your first preference? (Option 1 - Option 2 - Not sure – Indifferent - Neither) Please explain why. (300 word limit)
    1.  Neither – Although we are in agreement that TAMF needs to be replaced, councils have significant concerns with both of the options presented.
    2. Option 1 concerns: Councils have expressed concern around the accuracy of RO4 data which means it’s a risk to apply this data to any funding formula. Nationally, there are inconsistencies with how councils complete their RO4 returns and this responsibility doesn’t always sit with homelessness services who are best placed to know what level their spending is at.
    3. There are also concerns from councils that past funding doesn’t necessarily indicate what future costs will be, especially considering the sharp rise in temporary accommodation costs. If this pattern continues, which it is likely to in light of the cost of living crisis, future costs may far outweigh past costs.
    4. Using temporary accommodation costs to provide funding also doesn’t necessarily incentivise councils to reduce this cost or provide a space for innovation if funding is focused on emergency homelessness costs.
    5. Option 2 concerns: This option is of particular concern to councils with high costs such as those in the south as it doesn’t include a specific housing need indicator and population size doesn’t necessarily correlate to large numbers of housing need. For example, although London only accounts for 16% of the population, it accounts for 60% of national housing need. There is also often a time lag in population data which is often thought of as inaccurate due to the amount it changes.
    6. Due to concerns around the suggested ACA, as expanded upon in question 11, we also wouldn’t consider this to be the best way to calculate costs.
    7.  It is difficult for the LGA to best answer this question as some councils will be far better off than others depending on which option is applied, however, an option with a housing need indicator such as option 1 would be preferable.
    8. There is also a more fundamental issue with the funding model suggested. Huge increases in homelessness costs over the last years as a result of the pandemic and increasing inflation means the suggested formula is likely to be inadequate for any future costs incurred carrying out statutory homelessness duties by councils. Councils that are seeing a reduction in their funding as a result of both suggested formulas will, without doubt, struggle to meet their statutory obligations which suggests further thinking is needed on how budgets will be delivered to homelessness services.

       
  4. Are there other indicators of TA pressures you recommend we consider? (300 word limit) Please explain why. (300 word limit)
    1. In all of LGA’s recent engagement work with councils, lack of affordable move on provision was highlighted as a huge concern. In our recent rough sleeper strategy roundtable a number of councils stated that they were in the position of being unable to move households on from temporary accommodation because they couldn’t access social housing and the local private rented options were unaffordable and unattainable.
    2.  Recent LGA research indicated that housing waiting lists could double next year with some people potentially being stuck in temporary accommodation for five years. The recent private rented white paper also highlighted the lack of affordability of private rented house and found that frequent home moves are expensive with moving costs of hundreds of pounds. Rents nationally have risen by 7.4% across the UK. The private rented sector is particularly problematic in London where rents have increased by 15.8% over the last year and the number of properties listed has reduced by 35% due to a mass exodus of private landlords from the market, driving up competition for the remaining, overpriced housing.
    3. Taking into account housing pressures in relation to move on from temporary accommodation should be an indicator of temporary accommodation pressures as it leads to frequent use of temporary accommodation and long stays. In particular, social housing stock within the area and percentage of rents on available properties which fall within the Local Housing Allowance rate. Without suitable accommodation to move households into, councils face a huge challenge in keeping numbers in temporary accommodation down.
    4. ​​​​​​​Without affordable or accessible housing, it is also difficult for councils to prevent temporary accommodation use in the first place which over time will see further increase in the use of temporary accommodation.

       
  5. ​​​​​​​Of our proposed options in relation to missing data, which is your first preference? (Option 1 – Option 2 – Not sure – Indifferent - Neither) Please explain why. (300 word limit)
    1.  ​​​​​​​Neither – Similarly to the previous question, councils are uncomfortable with any option which doesn’t feature a housing needs indicator as it doesn’t accurately reflect the levels of work going on in the local area.

      5.2. ​​​​​​​Councils are also uncomfortable with any spending formula that features a punitive approach for returns with incomplete data. We fundamentally disagree that councils purposefully hold back H-CLIC data and believe it to be far more likely that the administrative burden presented by the H-CLIC quarterly return is what causes councils to submit incomplete data.

      5.3. ​​​​​​​In engagement discussions around this element, DLUHC officers stated there would be a process for extenuating circumstances such as IT failure. We believe this adds an extra administrative burden for councils who are demonstrably already struggling to submit data returns due to a range of reasons.

      5.4. ​​​​​​​Where councils are particularly struggling to submit data on a regular basis, we would encourage supportive measures to obtain the data through use of Homelessness Advice and Support officers. LGA would be keen to support this work for councils who require extra assistance.

      5.5. ​​​​​​​However, we do recognise that where data is missing government does need to calculate costs. We would therefore be more likely to support option 1 which features a housing needs indicator but for reasons previously mentioned, are unsure about the use of an ACA.

       
  6. ​​​​​​​Do the listed data sources used in the FHSG element represent an accurate reflection of homelessness pressures? (Yes - No - Partially - Not sure) Please explain why. (300 word limit)
    1. Partially – One issue in particular which has been continually raised by councils since the introduction of the H-CLIC alongside the Homelessness Reduction Act is the new inability of councils to count any work that happens to prevent homelessness before an active homelessness application is taken. Councils often commission support services to provide advice, support and guidance to people threatened with homelessness such as tenancy sustainment, mediation and housing support. Previously, councils could include this in their returns using information obtained by KPI’s and contract managers, however since the H-CLIC data now comes entirely from directly inputted homelessness applications, this information is not easy to include.

      6.2. ​​​​​​​In order to encourage councils to continue to commission these imperative services which help people before they are at crisis point, these preventions should be taken into consideration.

       
  7. ​​​​​​​Do you have any alternative suggestions for data sources that could be used as indicators of homelessness pressures in the formula? (500 word limit)
    1. While it is true that preventions into the private rented sector and applicants which fall into the main duty do present a large cost to councils, there are other areas of cost which are also costly and also present a potentially more beneficial outcome for applicants.

      7.2. ​​​​​​​Councils are being encouraged by the Homelessness Advice and Support Team to work towards a higher prevention to relief ratio, which will indicate their engagement with households before they become homeless. A lot of the work that takes place while an applicant is within the prevention duty will be around negotiation, mediation, and affordability assessments.

      7.2. ​​​​​​​In particular, services such as young person’s mediation will be expensive and time consuming generally with the goal of keeping the young person at home. These types of services require professional workers who often meet with the applicant and their family a number of times.

      7.3. ​​​​​​​Services carried out by front line homelessness workers with the goal of helping the customer stay put, such as affordability assessments, are also often the most time-consuming assessments which expert and technical knowledge.

      7.4. ​​​​​​​With an increasingly unaffordable private rented sector, lack of supported housing and ongoing issues in exempt accommodation, and dwindling number of housing stock, more onus should be placed on stay put outcomes. This could also increasingly become an option as no fault evictions are abolished and housing options teams have more of a chance to work with a customer to keep them in the home they are in.

      7.5. ​​​​​​​Currently, stay put outcomes (unless they are within the private sector – and even then, there is no emphasis placed on staying put within private sector) are not used as an indicator of homelessness pressures. Monitoring stay put preventions and using this data within the formula could be a good way for government to highlight this as a priority for councils when assessing homelessness.

       
  8. ​​​​​​​Do you want to see transitional arrangements introduced for 23/24 financial year? (Yes – No – Indifferent - Not sure)

    ​​​​​​​Not sure

     
  9. ​​​​​​​Do you want to see transitional arrangements introduced for 24/25 financial year? (Yes – No – Indifferent - Not sure)

    ​​​​​​​Not sure

     
  10. ​​​​​​​What percentage cap would you prefer to see? (5% in 23/24 and 10% in 24/25 as proposed – 2% each year - 5% each year - 10% each year – 20% each year – None - Indifferent - Other - Not sure)

    ​​​​​​​Not sure

     
  11. ​​​​​​​Please explain the reasons for your answers to the questions in this chapter, and provide any other thoughts or comments on this proposal. (500 word limit)
    1. We are in agreement that homelessness funding is overly complicated and also agree in principle to the simplification of funding. However, we are concerned that the HRA uplift formula is not representative of current pressures.

      11.2. ​​​​​​​The first element of the HRA uplift takes into account those in receipt of benefit. Being in receipt of benefits doesn’t automatically mean that household will be threatened with homelessness. Therefore, while this is a useful measurement where someone’s benefits do not cover their housing costs, its not necessarily the most effective way to measure this. Rising inflation and energy costs present a problem for those typically ineligible for benefits as wages fail to cover the costs of rent, food and utility bills and homelessness services may start to see an increase in those unable to pay mortgages where typically these case types have been lower in number. A better measurement that reflects affordability pressures would be the gap between housing costs and income.

      11.3. ​​​​​​​The HRG formula is more accurate for depicting costs for housing need but also isn’t perfect and can be complicated when applied regionally. Further work could be done with councils to develop a more appropriate formula. This would be preferable to rushing through a flawed formula during a time when councils are supporting residents through an economically difficult time due to the cost of living crisis.

      11.4. The proposed ACA would result in less money for smaller councils who may face complexities in housing needs such as coastal towns which are suffering with a housing crisis as a result of second homes. It also isn’t supported by the larger councils who would theoretically benefit from this, such as councils in London, as their housing needs far outweigh their comparatively large population size.

      11.5. ​​​​​​​With regards to transitional arrangements, as previously referenced, it is extremely difficult for the LGA to present a rounded view when some councils will be adversely affected by the new formula, which would require them to have a longer transitional period, while other councils will see themselves receiving a larger pot of money which they would naturally want to receive quicker. For example, councils in the North East of the country would benefit from a smaller transitional period where they will receive greater funding, whereas councils in London would likely prefer a longer transitional period in the event that they start to see an adverse reaction to a new funding formula and in order to prevent a cliff edge of funding.

       
  12. ​​​​​​​Do you agree that funding allocations for 2023-24 and 2024-25 should be announced this year, providing the earliest funding certainty possible? (Yes – No – Indifferent - Not sure) Please explain why. (300 word limit)
    1. Yes – We are generally supportive of councils having as much notice as possible for forward budgetary planning. We are also supportive of multi year funding, which was highlighted in our recent roundtable as well our temporary accommodation peer support programme as something councils want in order to enable them to commission innovatively and in line with their Homelessness and Rough Sleeping Strategies.

      12.2. ​​​​​​​However, this is with the caveat that any funding announcements are informed and built around councils feedback and concerns which we are not satisfied current proposals are.

      12.3. ​​​​​​​We are also concerned that this change to funding is coming at a time of great uncertainty for councils as they face a cost of living crisis which anticipates a larger number of approaches as people are faced with choosing between payment of rents and payments of other living costs such as council tax, food, utility and energy bills.

      12.4. ​​​​​​​There is also the fact that costing to homelessness services could be likely to fluctuate and therefore we would support a multi year funding model but with a caution that the needs of homelessness funding may change and government may be needed to intervene and modify pre-arranged funding agreements to include any emergencies.

       
  13. ​​​​​​​To what extent do you feel confident that local authorities would be able to provide a yearly spend declaration of HPG categorised under ‘prevention and relief’, ‘TA’ and ‘main duty/other’? (Very confident – Quite confident – Neutral – Slightly doubtful - Very Doubtful – Not sure)

    ​​​​​​​Slightly doubtful

     
  14. ​​​​​​​Please use this space to provide reasons for your answer and any further thoughts or comments on this proposal. For example, whether you think the above definition of ‘prevention and relief’ spend (as set out in para 5.5) is workable, if there are other spend categories which could constitute ‘prevention and relief’ that we have not listed above, whether you have views on the local authority's ability to provide this information, or any additional impact this extra reporting requirement may have? (500 word limit)
    1. We are hugely supportive of better data collection in this area and welcome suggestions around how this data could be collected. In principal, the suggested categories will be useful to understand how councils are spending funding and could theoretically point to some interesting outcomes, for example, the councils spending the most on prevention could have lower costs in temporary accommodation.

      14.2. ​​​​​​​It could also pave the way for more in depth future formulas which favour innovations in commissioning around upstream homelessness prevention and make it easier to see which councils are spending more in this area and compare that with H-CLIC data.

      14.3. ​​​​​​​We understand that it could also highlight which councils in need more support, in combination with H-CLIC data around which households go through the prevention/relief duties but still end up in main duty despite both councils and households adhering to all tasks on the applicant’s personal housing plan.

      14.4. ​​​​​​​However, the suggested formula could be problematic for councils to feed back on for a number of reasons. A lot of the areas are fairly cross cutting and it may be confusing for councils to separate their spending out into the suggested areas. For example, in some council’s prevention and relief officers may also work with applicants owed a main duty. Its also a big task to quantify every spend and categorise it correctly.

      14.5. ​​​​​​​If this spend declaration is introduced, councils will need a long lead in time as they will likely need to change the way they log their spends as well as centralising the use of different pots of commissioning in the same place. In particular, feeding in spends from teams outside of the council such as healthcare teams may need to have new processes integrated effectively.

      14.6. ​​​​​​​Staff working within the context of these environments are often overworked and under-resourced and adding an extra element of spend reporting when this time could be better spent elsewhere is also a concern. Simplifying funding formulas and reducing the amount of ad-hoc grants may be undone where staff are still overly focused on.