Housing LIN Technical Brief ‘Funding Extra Care Housing ’ London LIN Meeting – 5th December 2013

1. Housing LIN Technical Brief ‘Funding Extra Care Housing’ London LIN Meeting – 5th December 2013 Jon Head

2. The Challenge • ‘The nature of Extra Care Housing creates challenges for commissioning and funding structures not necessarily designed for the flexibility it entails.’ • ‘Charging in Extra Care Housing’, Housing LIN -2010

3. Aim of Technical Brief • “……we need Extra Care Housing to evolve and develop on as large a scale as possible – enabling it…..to respond to the aspirations and needs of the growing numbers of older people who are looking for affordable, high quality homes in which their future support and care needs can be met with dignity, and in ways that support their independence and wellbeing” • Financial viability clearly critical to achieve this

4. Main Parts of the Technical Brief • Introduction/Scene Setting • Capital Funding (lead – Ian Laight) • Revenue Funding • Housing (lead – Jon Head) • Care and Support (lead –Sue Garwood) • Also crossover issues • Capital<>Revenue • Housing<>Care /Support • http://www.housinglin.org.uk/Topics/browse/HousingExtraCare/FundingExtraCareHousing/

5. Since previous edition of Technical Brief (2005) – what has changed? • Huge expansion of ECH - funding from DH/Hsg Corp. • ECH Models generally much more diverse • Tenure patterns evolving – private/leasehold ECH • Strategic Approach to commissioning ECH as part of wider care economy • Tightened FACS criteria • Supporting People –come and gone • Personal Budgets – impact on service models • Value for Money • Evidence base for ECH – ILC, PSSRU etc.

6. Since previous edition of Technical Brief (2005) – what has changed? • More recent/current: • Reduced capital grant levels – impact on scale /facilities • Care and Support Housing Fund • Legislation – • Health and Social Care Act, and NHS changes • Care Bill • Affordability – Joseph Rowntree work • Welfare Reform Act - future of Exempt Accommodation • Fewer assumptions about how and whether ECH will have revenue funding

7. Focus of the Technical Brief • Extra Care Housing - defining characteristic for the Technical Brief: a ‘24/7’ on site care service • Emphasis that ECH is a housing model • Contents may also be relevant for other older people’s housing • Caveat about range of models covered • We don’t make ‘the case’ for ECH, this is done elsewhere

8. Technical Brief – audiences? • LA ASCRs (LAs with Adult Social Care Responsibility • LHAs (Local Housing Authorities -also with HB role) • Registered Providers • Private Extra Care providers • Care and Support Providers • NHS bodies

9. Technical Brief – 1. Capital funding • Current sources of funding • Which of these may still be suitable for funding new extra care schemes? • How scheme characteristics influence access to funding sources • Not all extra care schemes, providers or operators are the same • Evidencing and informing funding applications • Understanding demand and capacity, making your case for funding • Appraisal types for extra care housing • Not for profit and for profit approaches

10. 57 varieties of capital funding

11. 57 varieties of capital funding • Conventional HCA subsidy funding is still possible but at reducing levels per unit and competing with general needs on value for money tests • DH Care & Support Specialised Housing Fund evidence of the health savings that can be achieved through extra care / preventative provision • Section 106 agreements offer increased possibilities for developer funded extra care

12. 57 varieties of capital funding • Housing Revenue Account funded extra care - a short term opportunity? • Construction contractor finance • Real Estate Investment Trusts (REITS) • Institutional investors – (public) pension funds & insurance companies

13. Technical Brief – 2. Revenue Issues • Benefits and, where known, Welfare Reform Act impact • Housing Management and other accommodation-related services – funding and cost recovery • Care and support services – funding and cost recovery • Also: • Assistive Technology and alarm services • Funding of ‘quality of life’ and wellbeing services • Catering • Crossover issues –housing/care/support funding

14. Technical Brief – 2. Revenue Issues • Care and support services • Impact of Personal Budgets • ‘Core and Add on’ • What is in the core service? • How is it funded and charged for? • Well being services and charges • (see also Care and Support in ECH Technical Brief – 2010)

15. Funding ECH -Where next?... • Capital issues • L/T borrowing (20 years or more) current interest rate of 4.5% • Pension funds - 3.75% to 4% for 35 year terms but these are variable rates • Financial markets expect base rates will increase from current 0.5% to 1.0% within 3 years, to 1.7% within 5 years and to 3.0% within 15 years

16. Funding ECH -Where next?... • Capital issues • Registered Housing Providers stretching the repayment periods for new borrowings over 35, 40 or even 45 years • Welfare reform an uncertainty for future income /cost recovery • Further rounds of the Dept. of Health Care and Support Specialised Housing Fund? • Private Rented Sector Initiative could assist a market rent variant of Extra Care?

17. Funding ECH -Where next?... • Revenue Issues • Evolving ‘Core and Add On’ models • Future of Exempt Accommodation – ? to be replaced by ‘supported housing’, defined as:– • Designed/ designated to provide support • Where support provided is funded/commissioned by a public body • (source – ‘Support Solutions’ ) • Impact of 2016 Care Funding system (see forthcoming LIN Briefing Paper - ‘Impact of changes to social care funding/charging on extra care housing post Dilnot’

18. Thank you! C/o EAC 3rd Floor, 89 Albert Embankment London SE1 7TP email: info@housinglin.org.uk tel: 020 7820 8077 website: www.housinglin.org.uk Twitter: @HousingLIN