Government to probe Supporting People costs as it hands over an extra £400m

The government has awarded councils a surprise £400m extra under its Supporting People programme, but has launched an investigation into why the costs of some schemes have risen drastically since earlier estimates.

The total figure now available for the support schemes that will be run from the 2003/4 funding pot is £1.8bn, £400m more than the estimate announced in February.

The government suspects that councils have shunted other, ineligible, costs, such as high-cost support schemes for people with serious learning disabilities, into the Supporting People care services funding regime, which is intended primarily to help people who require support with their housing needs.

It pointed out in a statement that costs varied by up to 13 times between authorities. The average weekly cost of each unit of support for the lowest-spending council amounted to £7.11, but for the highest-spenders this rose to £95.71.

The review will be run by Eugene Sullivan, head of public sector services at consultant RSM Robson Rhodes. It will conclude by Christmas and will determine how much funding is available for the next two years.

An ODPM spokesman said the review was a "matter of great urgency" and would need to be completed before any funding could be settled for pipeline or future schemes that councils need to build.

He added: "When the programme was launched [in April 2003] no one thought in their wildest dreams that the cost of housing support could be so high in some instances. You do expect this to be low level and reasonably cheap. The government expects to get value for money."

Dave Smith, lead officer for Supporting People at Sunderland council, said: "Obviously something has happened here and I think the government is quite right to investigate this. I think they will find large amounts of money have been shifted around by certain authorities and that the ODPM would be quite right to claw back this funding from councils that have flouted guidelines.

"They have to get to the bottom of all this. It doesn't reflect well on our sector that a lot of chief executives and chief financial officers have taken advantage of the situation. The ODPM should investigate on an authority-by-authority basis and if councils have broken the rules they should be held to account and their names should be published."

But Chris Hampson, head of policy and strategy at Look Ahead Housing and Care, said: "This review is all probably too late now. The grant conditions need to be tightened up. Large parts of the programme seem to have been hijacked by higher-cost care schemes – such as learning disabilities – many of which shouldn't be in Supporting People.

"The definitions put in place at the outset were too vague, so it's not at all surprising that some opportunistic councils took advantage. The government will need to look at high-cost care schemes, for example mental health, and decide whether or not these should really be part of this."

The review will consider: variations between local authorities' costs and patterns of service provision; services previously paid out of other budgets where it is unclear how the resulting savings have been deployed and whether the programme is meeting its original objectives, including schemes that raise questions about compliance with grant conditions.

ODPM officials will shortly begin holding a series of regional seminars to brief councils on what the review will require of them and how they should be planning for future Supporting People schemes.