Supported housing saves the taxpayer billions – but it’s facing an urgent financial crisis

Supported housing is in financial crisis.

For people who are homeless, leaving care, veterans, survivors of domestic abuse, older people, and people with learning disabilities and complex mental health needs, supported housing provides safety, stability, and a chance to rebuild and live independently.

Every year, the National Housing Federation (NHF) and our housing association members celebrate ‘Starts at Home Day’, spotlighting the life-changing impact of supported housing. This year we cannot ignore that this vital sector is in an increasingly entrenched and worsening financial crisis, and that many of these homes, which hundreds of thousands of people rely on, may no longer exist in the future.

Since 2010, cuts to council budgets have meant funding for supported services have been significantly reduced, leaving many councils with no choice but to decommission supported housing services altogether. Alongside these cuts, supported housing providers have faced increased cost pressures from rocketing inflation and energy prices, exacerbated by recent rises to national insurance contributions.

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These dual pressures have plunged the sector into a deepening financial crisis. Their operating margins were already tight, but now many are running services at a loss, and without funding, they have been left with no option but to reduce services, close schemes, or stop providing supported housing altogether. Supported housing providers are doing everything they can to keep these vital services open, however they’ve told us that without urgent government intervention and funding, more than 50,000 supported homes – equivalent to 1 in 10 – are at imminent risk of closure. And while the supply of these homes is falling, the demand is rising, and funding is failing to keep up. We have fewer supported homes today than we did in 2007 and a total shortfall of up to 325,000 homes, based on unmet need.

When a supported housing scheme closes, it’s those who rely on the vital services it provides that suffer the most. It leaves someone with complex or high support needs sleeping rough or in unsupported temporary accommodation. It means someone with an adult learning disability could be placed into residential or psychiatric care, or a woman who has experienced domestic abuse has to live in a hotel, or mixed temporary accommodation. These people lose their support network, their choice over their lives and their sense of community, and as result, we all suffer, as the government ends up spending more money supporting residents through other emergency public services.

Overall, supported housing saves taxpayers £3.5bn per year by taking the pressure off a range of vital public services, including the NHS, the criminal justice system, homelessness services and social care. It allows people to recover safely in a home environment and reduces the need for crisis intervention – whether it’s preventing someone with complex mental health challenges being admitted into A&E or helping an older person avoid an emergency admission by managing their health at home.

Our research found that patients spent over 100,000 additional days in mental health hospitals last year due to a severe shortage of supported housing, costing the NHS £71m. Each week thousands of hospital beds are taken up because people who are medically fit to leave don’t have housing with the right support to move into, such as a live in carer or physiotherapy.

With the NHS already under huge pressure, a failure to invest in supported housing will jeopardise the government’s ability to deliver on its missions to build an NHS fit for the future and develop a National Care Service.

Earlier this year, over 170 organisations – including Age UK, the Royal British Legion, the Church of England, St Mungo’s and Refuge – wrote to the Prime Minister and the Chancellor, urging the government to take action and stop this crisis from worsening.

The government still has an opportunity to do this and turn this situation around for the hundreds of thousands of people that rely on vital supported housing services, for all of us who rely on well-run, efficient public services, and for the government to deliver their own missions.

To do that, the government’s upcoming homelessness and housing strategies must outline a plan to deliver a vibrant, sustainable supported housing sector. The autumn budget provides an opportunity to deliver an emergency fund for services at imminent risk of closure, and long-term and sustainable funding for support services, to protect the future of these homes.

This year, ‘Starts at Home Day’ is not just a celebration. It’s a reminder that behind every supported home is a person and a future worth investing in, which benefits us all. The government must act now to save our supported housing.

Suzannah Young is policy lead at the National Housing Federation. Starts at Home Day is on 29 August. For more details head to startsathome.org.uk/.

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