The Supporting People funding programme will be cut from £1.816bn this year to £1.801bn in 2004/5.
Local authorities will have to save 2.5% during 2004/5.
But none will have to save more than £800,000, they have been told.
More than half of the money authorities save will be used by the ODPM to pay for new schemes that began in 2003/4 and had funding for buildings but did not have full Supporting People funding to run the actual scheme.
Terrie Alafat, head of the ODPM's Homelessness Directorate, which runs Supporting People, said: "There has been some nervousness in the sector about these schemes so it is important we bring them into the fund."
The National Housing Federation said the instruction to save 2.5%, combined with no increases to take account of inflation made for a "challenging operational environment".
The funding announcement came yesterday as a review of the programme was published.
The review was commissioned in October after the cost of Supporting People rocketed from £1.4bn to £1.8bn. Some suspected the scheme was being used to pay for expensive schemes providing a high level of care, normally funded by social services, which Supporting People was not intended to fund (HT 24 October 2003, page 15).
The review said there were 30 high-cost councils whose unit costs made up almost a third of the total Supporting People fund and who were responsible for almost half of the most expensive units. Just six of the authorities increased their funding by 60% between the initial funding estimate and final funding announcements for Supporting People.
The review said the rise in Supporting People costs were partly because of schemes funded by social services or the NHS, but there had also been expansion of services to meet need. It added that the pot paid for existing and recently developed services – not all of which were strategically relevant.
The review's author, Eugene Sullivan, head of public sector services at consultants RSM Robson Rhodes said he did not want to "name or shame" the authorities involved and added that more work was needed to determine why the costs were so high.
However, he said that while £1.8bn was too much to pay for current services, there was unmet need so "it does not follow that £1.8bn is too much for the needs of vulnerable people in this country".
He said savings could be found but the pace of change must not cause difficulties for service users and small support organisations.
The review suggested a number of ways of "liberating" some of the excess money for other supported housing schemes.
The government has taken up many of the review's recommendations, including bringing forward audit commission inspections for the local authorities with the highest costs. As many as possible of these reviews will be done between now and autumn, in order to inform decisions for the spending review by client group – particularly services for the elderly, homeless and people with mental health or learning difficulties – so that similar types of services can be compared.
The ODPM will offer extra resources – although no figure has yet been decided – to help local authorities administer Supporting People.
The review also recommended that integrated support packages, which involve elements of non-housing-related support, should continue but other departments could contribute to funding them.
It added that "unpopular" vulnerable groups, for example ex-offenders, should be protected.
The ODPM has also issued a consultation on the grant conditions which local authorities and providers abide by. However, the paper does not propose any significant changes to the current rules. The government is also gathering information from local authorities on the cost, range and review process of services in their area.
The reviews of local authorities and ODPM research will help to inform the ODPM's Supporting People bid in the spending review.
Alafat said she "broadly agreed" with the report's suggestions, many of which will be implemented by government, although not necessarily in the exact manner laid out in the review. "We are working to put Supporting People on a sustainable and equitable footing. We do expect [local authorities] to identify where savings could be made without cutting services for vulnerable people."
Source
Housing Today
