Draft Budget spending plans leave housing support providers facing a real terms cut do nothing to alleviate cost of living pressures on frontline workers, says Katie Dalton.
On December 13 the Welsh Government published its Draft Budget for 2023/24. Their press release called it a budget to ‘protect public services and the most vulnerable’ but, in our view, it fell short on one critical element: the Housing Support Grant (HSG).
The HSG is the successor to the Supporting People Programme and funds the vast majority of homelessness and housing support services across Wales. This includes tenancy support services that help to prevent evictions, supported accommodation for people leaving homelessness, refuges that provide safe haven for abuse survivors, and the internationally acclaimed Housing First model for people who have experienced repeated homelessness and multiple traumas.
Over the past decade the Supporting People Programme faced multiple cuts, falling from £139 million in 2011/12 to £124 million in 2015/16. It then became the Housing Support Grant (HSG) in 2019/20 and during the pandemic it was increased to £166 million to reflect the increased demand on services. It has remained at that level ever since.
So, what does this mean in real terms? According to the Bank of England, £139 million in 2012 equates to £183 million in November 2022, given inflation. This points to a £17 million real terms shortfall in funding for housing support services, even if homelessness had not increased.
Our members have been clear that services are over-stretched and they are in desperate need of additional funding. In November we wrote to the minister for climate change and the minister for finance and local government urging them to increase the HSG in line with inflation for 2023/24.
Unfortunately, the HSG remains at £166 million in the recent draft budget.
Cost of living crisis and frontline staff wages
While we welcomed the increase to the Housing Support Grant during the pandemic, much of the additional funding was spent on increasing service capacity, rather than increasing wages. Most frontline workers tell us they have not had a meaningful pay rise in over a decade.
In September 2022, Cymorth published a report that exposed the financial challenges facing frontline homelessness and housing support workers. This research shows that even before the energy bill increases this autumn, 79 per cent of frontline workers were not putting on the heating in order to save money, 44 per cent were struggling to pay bills, 11 per cent were struggling to pay their rent, 7 per cent were using food banks and many others were skipping meals and taking on additional jobs. Many were considering leaving careers they love because they can no longer make ends meet, highlighting better paid jobs in retail and delivery services which came with much less stress.
The increased cost of running services
Homelessness and housing support providers are increasingly concerned about the cost of running services. Accommodation-based services such as supported accommodation are particularly affected by the increase in energy bills. Some providers have told us they feel unable to bid for certain housing support contracts as the funding offered does not cover the true cost of delivering the service. In some cases, the contract value is the same as a few years ago, with no inflationary increase to reflect the cost of running the service today.
As well as choosing not to bid for contracts, there is a risk that some providers may walk away from existing agreements or reduce service capacity, if there is no additional resource. Commissioners are talking about the choice they need to make between paying staff fairly and cutting services, or retaining services but continuing to lose staff.
Risks to other public services
Research conducted by Cardiff Metropolitan University has demonstrated that homelessness and housing support services deliver significant benefits to other public services, with a net saving of £1.40 for every £1 invested in the Housing Support Grant. We also know that support providers often pick up the pieces when people who have experienced trauma and system failure have nowhere else to turn. They often prevent people going into hospital, reduce pressure on social care, and help people to avoid entering the criminal justice system. If housing support providers are unable to maintain their service provision, the negative impact will not be limited to homelessness, but will also be felt by health, social care and justice services.
A rethink is required
One of the most galling aspects of the draft budget documentation was the reference to heart-breaking statistics from our Struggles from the Frontline research. Yet the Welsh Government did not offer anything to alleviate the cost-of-living crisis facing these key workers. We understand that ministers are facing extremely difficult decisions as they finalise the budget for 2023/24, but the risks posed by not increasing the HSG are significant. We urge ministers to reconsider their decision and award an inflationary uplift to the Housing Support Grant in their final budget in February.
Katie Dalton is director of Cymorth Cymru