Press release

New funding model for supported accommodation

The new funding model for supported accommodation includes women’s refuges, homeless shelters and housing for those leaving care.


Supported housing, which supports some of the most vulnerable people from across the country, will continue to be exempt from the Local Housing Allowance cap until 2019. From then the new funding model will protect the sector from the cap with a top up of additional ring-fenced funding. The amount of top-up funding will be set on the basis of current projections of future need.

In a statement to Parliament today, Work and Pensions Secretary Damian Green reiterated the government’s support for this crucial sector and determination to secure its long-term future. The new ring-fenced pot of money will give local authorities greater flexibility to commission services in line with local needs.

The government will be consulting with the supported accommodation sector over the details of the funding model in the coming months.

Work and Pensions Secretary, Damian Green said:

We know the valuable role that these organisations play in communities across Britain. Women’s refuges or housing for young people with learning disabilities are important parts of the support system for vulnerable people.

As we build a Britain that works for everyone, not just the privileged few, our new funding model will help those people who need it the most.

The government has had extensive engagement with stakeholders and charities before coming to this decision.

The new model will mean Housing Benefit and the housing element of Universal Credit will focus on paying for core housing costs, while still ensuring the sector is protected from the Local Housing Allowance cap.

Communities Secretary, Sajid Javid said:

As a government that works for everyone we have been working hard to ensure that the most vulnerable in society get the right level of support.

That is why we have extended this exemption and will implement a new funding model, which will underpin the provision of safe, stable and supportive places to live for those in need.

The funding for local authorities in England will allow them to have a more coordinated approach to commissioning, funding and overseeing the support in this area, driving up quality and efficiency in the supported accommodation sector and ensuring the right support is in place where it is needed. Housing is a devolved matter and the appropriate funding will be allocated to the devolved administrations.

The government has also announced that benefit claimants in supported accommodation will be exempt from the lower shared accommodation rate, in recognition of the vulnerable nature of many of their residents.

Denise Hatton, Chief Executive of YMCA England, the national council of YMCAs across the country, said:

YMCA welcomes the government’s announcement and the consultation process that is about to get underway.

As the largest voluntary sector provider of supported housing for young people, it would be difficult for YMCA to over-emphasise how important this issue is for the long-term survival and sustainability of the sector. Supported housing providers have been in a state of uncertainty since the initial announcement was made in last year’s Autumn Statement and it is, therefore, positive to see greater clarity going forward.

YMCA will be formally responding to the consultation but it particularly welcomes the commitments set out to protect levels of spending for supported housing and to fix rent levels to the one-bed Local Housing Allowance rate rather than the shared accommodation rate.

YMCA also welcomes the announcement that government will ring fence the budgets being devolved to local authorities. We will be looking to work further with government on any new arrangement to ensure the money ultimately ends up supporting young people to have a safe and secure place to live.

More information

We will publish a consultation on the detail of the funding model shortly.

Housing is a devolved matter in Scotland and Wales and the appropriate funding will be devolved.

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Published 15 September 2016