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Issue Number 16
January 2005
RSLs Panel Bulletin: Supporting People: The RSL Perspective                                               Issue No. 16

1   INTRODUCTION                                                   and county councils that administer
                                                                   funding under Supporting People.
1.1 Supporting People went live in April 2003
    and now 18 months on this bulletin takes a                1.4 Section 2 of this bulletin sets out a brief
    look at how the new arrangements are                          summary of the main types of contractual
    working from the perspective of RSLs as                       and mutual arrangements. It also covers
    landlords and providers and highlights the                    the issues which arise under each type.
    areas of concern. Whilst Supporting                           Section 3 looks at some of the difficulties
    People applies throughout the UK, there is                    RSLs are experiencing.
    variation in the speed with which the new
    arrangements are being introduced, with                   2    SUMMARY OF ARRANGEMENTS
    England taking a lead and Wales and
    Scotland some way behind in terms of                      2.1 The relationships between the main
    implementation.                                               players for SP are shown in this diagram.

1.2 There is a now available a number of best
                                                                                       The AA Team
    practice guidance documents on aspects of                                           [the funders]
    Supporting People. Some documents
    helpful to RSLs as landlords and providers
                                                                                         The Service
    are listed below.                                                                    User/Tenant
                                                                    The Support                             The Landlord
    These are:                                                       Provider

       Supporting People Administrative                      (Reference: Supporting People and the contractual
        Guidance: The Short Guide for                         Web 2003, SITRA)
        Providers, DTLR (now ODPM) 31
        October 2001                                               The AA team provides the funding. The
       Supporting people Financial Package:                       AA is the local authority that formally
        guidance for service providers, NHF                        issues a contract on behalf of a Joint
        briefing August 2002                                       Commissioning Body to fund support
       Supporting People and VAT: a joint                         provided by the support provider. The
        briefing, NHF and SITRA September                          grants for SP from the ODPM are the
        2002                                                       Supporting People Programme Grant and
       FLAP Supporting people and RSL                             the Supporting People Administration
        Agency Relationships: Guidance on                          Grant (to cover implementation costs).1
        the Partnership Arrangements, NHF
        and SITRA briefing October 2002                            Most services under SP are delivered to
                                                                   people living in rented properties specially
       RSL Agency Agreements, SITRA
                                                                   designated as accommodation where
        briefing June 2003
                                                                   support is also provided. The Landlord is
       Supporting People and the Contractual
                                                                   a local authority, an RSL or a private
        Web, SITRA briefing May 2003.
                                                                   company. Support providers provide the
       Accounting for Supporting People,
        NHF and the HC Briefing Note
        February 2003.                                        1
                                                                  Under the Audit Commission’s Comprehensive
       Supporting     People:    Accounting                  Performance Assessment (CPA) for English local
                                                              authorities, those rated as excellent have lighter touch
        guidance Note, Scottish Federation of
                                                              grant conditions and directions. The CIPFA publication
        Housing Associations, July 2004.                      Supporting People: The Essential Guide for Finance
                                                              Practioners, 2004, sets out the detail on the financial
1.3 Supporting People has introduced a range                  aspects for local authorities of supporting people and the
    of    contractual   arrangements     and                  differences that apply to LAs rated as excellent under
                                                              CPA against those not so rated. For example, excellent
    partnerships for RSLs with providers and                  authorities can use a wider definition of ‘welfare
    the Administrative Authorities (AAs) for                  services’ in their use of the programme grant. They are
    Supporting People. These are the unitary                  also not required to be an AA and operate a
                                                              Commissioning Body.

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RSLs Panel Bulletin: Supporting People: The RSL Perspective                                      Issue No. 16

    support service to people. They may also                     Floating support – The AA awards the
    provide the housing management service                       support contract to a non-landlord support
    on the landlords behalf. Sometimes the                       provider who delivers services to users
    landlord provides the support service in                     with a variety of landlords (or who might
    addition to their housing management                         even be owner occupiers).
                                                                 From the RSL perspective they can
2.2 From April 2003 interim contracts had to                     therefore be involved in upto four different
    be in place between providers and their                      types of arrangement, with a number of
    AA.       These were designed to be                          providers and AAs. There will also be a
    straightforward and be based as far as                       mix of contractual and non-contractual
    possible on existing information. More                       arrangements.
    detailed contracts are to be drawn up
    following each service’s first review. In                    A joint working protocol – which is a
    this way SP is to move to what is termed                     three way agreement between AA,
    its steady state. AAs must carry out all                     landlord and support provider – sets out
    service reviews by April 2006.                               how all three parties are to deal with
                                                                 commissioning of new services, monitor
2.3 The ODPM developed a set of four models                      and review existing services, share
    to cover the complex range of situations                     information and deal with crises.
    when      support    functions,  housing
    management and landlord functions may                        Where there is a non-contractual
    be carried out by separate organisations,                    arrangement, how the various parties will
    and the ways the various parties and the                     work together is guided by either:
    AA can work together. Often though
    things are straightforward as these three                       A service level agreement – this sets
    functions are carried out by the same                            out how support providers and
    organisations, for example, in sheltered                         landlords will work together in
    housing schemes.                                                 situations where the support provider
                                                                     does not carry out the housing
    Models                                                           management, or
                                                                    A floating support agreement – this
    Fully sub-contracted scheme – The AA                             covers floating support schemes where
    awards the support contract to the landlord                      there may be a variety of different
    who in turn enters into a sub-contract or                        landlords and is similar to a service
    management agreement with the ‘front-                            level agreement.
    end’ support provider. Under this model,
    the support provider is the landlord’s                    2.4 RSLs    may      have    the     following
    managing agent in respect of both housing                     arrangements.
    and support.
                                                                 (i) Hold contracts with the AA, and sub
    Agency managed scheme – The AA                                   contract both housing management
    awards the support contract directly to the                      and support to an agent (fully sub
    support provider, who is simultaneously                          contracted schemes).
    engaged as a sub-contractor by the
    landlord. Under this model, the sub                          (ii) Have management agreements with
    contract or management agreement only                             providers for housing management
    covers housing matters.                                           services only (agency managed
    Separately managed scheme – The AA
    awards the support contract for a particular                 (iii) Undertake   housing  management
    scheme to the support provider – but the                           services  themselves  (separately
    landlord does the housing management                               managed schemes and floating
    themselves.                                                        support).

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RSLs Panel Bulletin: Supporting People: The RSL Perspective                                       Issue No. 16

    Access to funding differs under each                          common type of service where this
    arrangement.                                                  contract is used is sheltered housing.
                                                                  Providers will receive SP ‘subsidy’ by
    (i) Receives the monies under the support                     way of payments in advance for each
        contract from the AA and pays an                          service user who is deemed by the AA to
        agreed fee to the support provider as                     be ‘eligible’ for subsidy. Eligible service
        its agent for both support and housing                    users are those who are exempt from
        management.                                               charging because they are in receipt of full
                                                                  or partial Housing Benefit or are assessed
    (ii) Pays monies to the support providers                     as such under the AA’s Fairer Charging
         for their housing management                             arrangements, or receive transitional
         services.                                                protection from charging. Payments are
                                                                  based on schedules of eligible service
    (iii) No cash flows (there may be side                        users. Charges from those service users
          contracts to deal with office hire etc).                for whom subsidy is not paid will need to
                                                                  be collected either through the Tenancy
2.5 Where an RSL has a support contract with                      agreement or through a separate support
    the AA under the interim arrangements                         agreement.
    they are one of three types:
                                                                  In Scotland, the accounting treatment of
       block gross                                               supporting people contacts is outlined in
       block gross (chargeable)                                  Supporting People: Accounting Guidance
       block subsidy.                                            Note, issued by the Scottish Federation of
                                                                  Housing Associations in consultation with
    The accounting treatment for these                            Communities Scotland, July 2004.
    contracts in England is covered in
    Accounting for Supporting People Briefing                 3   RSLs CONCERNS
    Note NHF/HC February 2003.
                                                              3.1 Variety in the contracts
    Block gross – these are issued for short-
    term services. All users of short-term                        There are differing notice and review
    services are exempt from charging.                            dates, and payment dates within contracts.
    Funding is provided by the AA following                       RSLs need to keep on top of their portfolio
    submission of one annual invoice based on                     of contracts and have a clear calendar of
    the contract price in instalments in                          events.
                                                              3.2 The impact of differences between local
    Block gross (chargeable) – users of these                     authorities
    services are not exempt from charging
    unless they are eligible for Housing                             The approach to service reviews varies
    Benefit or otherwise exempt under the                             between authorities and this means
    AAs ‘Fairer Charging’ arrangement.                                that RSLs are having to prepare
    Where block gross chargeable contracts                            differing amounts of supporting
    are used, the AA is responsible for                               information and detail depending on
    collecting the charges, although it can                           the individual requirements set by
    subcontract the provider to do this if it so                      each local authority. Ideally a degree
    wishes and the provider agrees. Funding                           of standardisation is needed on the
    here is provided by the AA following                              information required so that RSLs can
    submission of an invoice based on the                             follow a consistent approach. A
    contract price in instalments in advance.                         further complication is that excellent
                                                                      CPA authorities in England have
    Block subsidy contracts – this is used for                        greater discretion about the conduct of
    chargeable service where the provider will                        service reviews.
    be collecting the charges. The most                              There has been a reluctance to move
                                                                      from interim contracts to steady state

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RSLs Panel Bulletin: Supporting People: The RSL Perspective                                      Issue No. 16

        contracts because local authorities did                      excellent under CPA in England. This
        not know what money was going to be                          is something that RSLs will have to
        available in the future. Past reductions                     clarify with individual authorities in
        in overall grant did not auger well for                      such cases.
        future      funding      levels.     The                    Payment terms differ and have to be
        announcement        of     the    2005/6                     tracked to ensure cash flow is not
        supporting people grant allocations                          incorrectly forecast.
        has reduced the overall grant funding                       Documentation in support of payments
        and has not removed uncertainty, as                          is not always available or is not clear.
        the long-term distribution formula will                     Guidance on VAT issues can be found
        be subject to consultation in early                          in the joint NHF and SITRA briefing
        2005. Steady state contracts will                            Supporting people and VAT, but there
        however need to be in place for April                        remains some outstanding issues
        2006.                                                        concerning whether items are subject
       Some AAs have a cash limited subsidy                         to VAT. In practice too, Supporting
        and although they are not allowed to                         People teams in authorities are not
        restrict eligibility for subsidy, in                         staffed with VAT specialists and there
        practice RSLs are experiencing                               is a lack of understanding about VAT
        difficulty getting new people accepted                       issues and how they impact on RSLs.
        onto programmes and there is a                              RSL IT systems are based around
        suspicion that this is due cash limits.                      tenant accounts and systems need to
       The ODPM announced a nil inflation                           be adequate to track income from
        allowance in the overall grant for                           various schemes and allocate monies
        2004; so many RSLs did not receive                           to individual accounts. It is not always
        any inflation uplift. Some AAs still                         clear when dealing with tenant
        uprated with the result that there is a                      enquiries whether arrears are down to
        disparity between schemes. In 2005 all                       the individual or will be covered by
        AAs are facing grant cuts and RSLs                           subsidy that is yet to be posted. Tenant
        will be facing further pressures to                          accounts not covered fully under
        accommodated inflation increases in                          contracts have to be tracked and
        their SP costs.                                              charges levied and collected.
       There     is     sometimes     a    poor                    Differences in local authority’s annual
        appreciation of the impact of deficits                       uplifts are leading to differential
        on RSLs finances and the constraints                         charging and billing problems.
        governing       housing      management
        services that prevent cross subsidy.                  3.4 Information requirements

3.3 Accounting Issues                                               Inevitably        new       information
                                                                     requirements are generated by the new
       Guidance is available in the NHF and                         arrangements, but this has an impact
        the HC Briefing Note February 2003,                          on RSL IT systems and associated
        Accounting for Supporting People and                         costs.
        Supporting      People:     Accounting                      The introduction of standard work
        guidance Note, Scottish Federation of                        books in England from April 2004 has
        Housing Associations, July 2004.                             simplified recording, but AAs retain
       The 2005 Statement of Recommended                            the power to request information
        Practice for RSLs update that is                             additional to this.
        currently out for consultation looks to                     There is no standardisation in the
        include guidance on the accounting                           information required for scheme
        treatment RSLs will need to adopt for                        reviews.
        supporting people income.                                   This lack of clarity and standardisation
       There may be exceptions to the types                         hampers the development of IT and
        of payments under the interim                                information systems.
        contracts for the authorities rated

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RSLs Panel Bulletin: Supporting People: The RSL Perspective                                       Issue No. 16

3.5 Staffing                                                  4.5 As the arrangements move towards the
                                                                  steady state and service reviews gather
       The new arrangements have increased                       pace, RSLs would welcome further clarity
        the time spent by RSL office staff                        and consistency in the approaches local
        supporting colleagues on site with                        authorities adopt towards service reviews
        what is needed from them and an                           and in the information they need to
        increased paper workload for site staff.                  provide. On the question of RSL financial
        This has an impact on overheads.                          viability it would seem sensible for the
       The increasing administration burden                      Housing Corporation and the other
        for staff on site has had an adverse                      regulators to provide assurance on this
        impact on recruitment and leads to                        matter, rather than each local authority
        additional training costs.                                undertaking its own check. Some
                                                                  standardisation or protocol on the
4   THE FUTURE                                                    approaches nationally is needed to reduce
                                                                  the overhead load.
4.1 From an RSL perspective the SP
    arrangements and the shift in contractual                 USEFUL  SOURCES             OF     FURTHER
    arrangements it introduces have an                        INFORMATION
    associated ‘overhead’ burden, which in
    time will diminish as the system beds in                  CIPFA’S RSL Panel
    and experience grows. The past year has
    seen clarification on a wide range of                     The RSLs Panel reports to the Institute’s
    issues: information, accounting and                       Public Finance and Policy Board. Its areas of
    contract standardisation. However there                   interest and activity are:
    will continue to be great variation between
    AAs in how the SP programme is                               consideration of finance and policy issues
    managed.                                                      relating to registered social landlords
                                                                 the production and dissemination of
4.2 The biggest concern for the future lies                       relevant advice and material on best
    with the funding uncertainties, and the                       practice for members and employers on
    reduction in the overall future grant pot for                 social housing issues
    Supporting People. These uncertainties                       responding to government, professional
    call into question the ability of RSLs to                     bodies’ and other bodies’ consultation and
    uprate staff salaries that are covered by                     discussion papers.
    SP. Already problems have emerged.
    RSLs face the issue of treating all their                 The Panel meets three times a year. Its
    staff equitably, whatever the funding that                meetings consider technical issues in the field
    supports these salary costs, but having to                of social housing finance, responses on
    manage shortfalls due to uprating in                      government and others’ consultation papers,
    funding not keeping step with staff salary                and Panel projects.
                                                              Panel Members
4.3 Deficits will need to be tackled and non-
    viability addressed. RSLs will need to                    The Panel membership includes practitioners
    ensure they have accurate costings, that                  and consultancy firms working in and for
    there is the proper treatment of start up                 RSLs, along with representatives from the
    costs and that they have a clear                          National Housing Federation and national
    understanding of the relationship between                 regulators. Its current membership consists of:
    future income, costs and surplus/ deficits.
                                                              Richard Sheppard (Chairman), Methodist
4.4 At a practical level differences in                       Homes Housing Association Ltd
    arrangements between local authorities                    Andy Burchell, Parkside Housing Group
    compounds concerns for RSLs dealing                       Arthur Cockburn,        Prospect   Community
    with many authorities.                                    Housing Ltd

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RSLs Panel Bulletin: Supporting People: The RSL Perspective                                       Issue No. 16

Suzanne Dowse, (Secretariat), CIPFA                           FURTHER DETAILS
Andrew Heywood, Council of Mortgage
Lenders                                                       Details about the RSLs Panel and its activities
Carole Hicks (Secretariat), CIPFA                             can be found on the Panel website
Lakhbir Jaspal, Accord Housing Group                
Harry Lloyd, National Assembly for Wales
Brian Logan, Hanover (Scotland) Housing                       COMMENTS
Patrick McCarthy, Forest of Dean LSVT                         If you have any comments or suggestions
Arthur Merchant, RSM Robson Rhodes                            regarding this bulletin please contact Carole
Katrina Michael, Mid-Wales Housing                            Hicks, Finance and Policy Manager, CIPFA, 3
Association                                                   Robert Street, London WC2N 6RL (tel 020
Stephen Purser, The Housing Corporation                       8318 0320 or email
Deb Reynolds, Adullam Housing Assocaition
Julie Robinson, Whitefriars Homes Ltd
John Squires, Wyre HA
Norman Thomas, Places for People Group
Anne Turner, Jephson Housing Association
Warren      Finney,     National    Housing
Roy Yates, Communities Scotland

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