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Written Statement: Distribution of the Housing Support Grant

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The Housing Support Grant (HSG) brings together three previously existing grants – Supporting People, elements of the Homelessness Prevention Grant and Rent Smart Wales enforcement funding. The HSG requires authorities to take a whole system response to homelessness – a response which focuses not only on statutory definitions of homelessness, but also on the underlying causes. This will facilitate the earliest possible interventions, which we know to be both the most effective and the most economical.

As I set out last month the HSG is based on a single strategic planning mechanism, building on the existing duty of Local Authorities to produce a Homelessness Strategy. This single strategic planning mechanism and funding stream present us with an opportunity to ensure resources are effectively targeted to have most impact and to support best practice and good decision making.

We have long recognised that the distribution of the previous Supporting People Grant was not reflective of local need. This issue was first highlighted by Aylward in 2010, it was then picked up by the Wales Audit Office in their report of 2017 where they recommended that Welsh Government develop a new funding formula to redistribute funding in a way which reflects strategic objectives. The Public Accounts Committee made further recommendations, accepted by the Welsh Government, in this area in 2018

The establishment of the new combined grant, elements of which are distributed in different ways, was therefore an obvious moment for us to reflect on the approach to distribution of funding.

Given the complexity of this area research was commissioned, alongside an extensive programme of stakeholder engagement. Two pieces of research were commissioned looking at two key issues; the general distribution of funding and the variation in use of funding for the support of individuals with Learning Disabilities (LD) across Wales.

I have today published the outcomes of those two pieces of research – “Housing Support Grant: Development of a funding formula” https://gov.wales/housing-support-grant-development-funding-formula and ‘Understanding Local Authority Funding for Learning Disability Housing Support Across Wales’ https://gov.wales/understanding-local-authority-funding-learning-disability-housing-support-across-wales. This statement sets out the next steps I have agreed in response to the evidence and recommendations set out in the reports and related advice.

I am grateful to Cadenza for the work they have done in preparing the Learning Disabilities research report. I am also very grateful to Alma Economics and to the stakeholders with whom they and officials have extensively engaged in developing proposals for a new distribution formula for the HSG.

I have considered very carefully the research findings and feedback from the stakeholder engagement. I have been very mindful of the need to consider both in the context in which we are currently operating.

In relation to the work on LD I recognise that different local authorities are taking a very different approach to the funding of services for this vulnerable group. I also recognise the vital importance of the support provided regardless of how it is funded. The evidence demonstrates the complexity of this area of support and the inter-relationship with delivery of social care services. It is clear to me that we must protect provision for this group and that the funding rightly sits within HSG.

However, there is clearly a need to move toward a more consistent approach to commissioning of LD services. To support this I have tasked officials with provision of clearer definitions of housing support and care to inform guidance on what should be funded through the HSG.

I will also be asking each local authority to undertake a review of their housing support provision for those with LD, the aim of which would be to identify whether that support accords with the new HSG guidance. Officials will work with local authorities undertaking these reviews which I expect to culminate in a report to Welsh Government and an action plan for addressing any issues identified.

In considering the report on distribution I have been struck by how significant the impact on allocations to some Local Authority budgets would be if we were to implement the formula as set out in the Alma Economics report, even allowing for a very extensive transitional period.

The logic of moving to a fairer formula based on need is recognised; it is clear there is a disconnect between the distribution of the Grant and the distribution of needs across Wales. However it is equally clear that the funding as currently distributed is used in full in each and every corner of Wales to address real needs and provide much needed support services for vulnerable people.

At a time when we are collectively focused on shifting our policy focus to true and early prevention, and genuinely person centred rapid rehousing approaches to tackling homelessness I believe there would be significant risks in progressing with these redistribution proposals.  I am also aware that, having been able to secure the best Local Government settlement we have enjoyed for some time there may be a danger that the purpose of the settlement might be undermined if we address the challenge of distribution of HSG in isolation.

Fundamentally, I cannot justify the potential impact on services in the context of increased pressure on homelessness services across Wales and particularly acute increases in some areas.

Such a move would be indefensible at the present time and as such I am making clear today that there will be no change to the distribution of HSG during this Assembly term (i.e. no change for financial year 2020-21 or 2021-22).

That said we cannot ignore the disconnect between distribution and need in the longer term, but any change needs to also be informed by the outcome of work set out above in relation to support for individuals with learning disabilities and a review of those homelessness prevention projects currently funded directly by Welsh Government. This work will continue over the coming year as will our close collaborative working with all stakeholders.  At such time as we have the wider evidence base we will consult formally on the options available to us.

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