THIS REPORT RELATES COUNCIL TO ITEM 28 ON THE AGENDA

STIRLING COUNCIL ENVIRONMENT SERVICES

25 JUNE 2009 NOT EXEMPT

STRATEGY TO MEET THE TEMPORARY ACCOMMODATION NEEDS OF HOMELESS PEOPLE

1 SUMMARY

1.1 At its 11 December 2008 meeting the Council instructed the Director of Environment to bring forward further proposals for the development and funding of the Homelessness Service, including temporary accommodation. This report seeks the approval of a strategy to meet the temporary accommodation needs of homeless people.

1.2 The changes in homelessness legislation since the introduction of the Housing () Act 2001 have brought about an increase in the number of homeless applicants to whom the Council has a duty to provide temporary and permanent accommodation.

1.3 The Homelessness Service has taken a number of steps over the past three years to increase the availability of directly provided temporary accommodation and to reduce the costs to the Council by avoiding the use of bed and breakfast. However, as a result of a significant increase in the numbers of applicants in temporary accommodation over the last 18 months the level of use of bed and breakfast, and the costs associated with it have increased significantly.

1.4 The core objective of the strategy set out in this report is to increase the provision of leased or directly owned accommodation with a view to eliminating the routine use of bed and breakfast by the end of March 2012. The strategy also addresses the need to improve the level of support and supervision provided to homeless applicants, to minimise any risk of disruption to local communities through anti social behaviour and to develop specific supported provision for those clients with the highest support needs.

1.5 The Service has identified a need for a business plan for the homelessness activity. The proposal is that the service moves to a full cost recovery approach for the accommodation it uses.

1.6 The strategy includes a proposal to purchase a number of properties for use as temporary accommodation using prudential borrowing and to increase the use of dispersed lets to meet the urgent need to reduce Bed and Breakfast accommodation. An acquisitions strategy including proposals to ensure that the Council’s actions support the local housing market by freeing up purchase chains will be presented to Council after the summer.

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2 RECOMMENDATIONS

2.1 To approve the actions set out at paragraphs 3.15 to 3.18, aimed at increasing the supply of directly provided temporary accommodation.

2.2 To approve the move to a full cost recovery approach for accommodation used to meet the housing needs of homeless people.

2.3 To note that moving to a full cost recovery model will result in an end to Hostel Support Grant payments from the Scottish Government by 2010 and to agree that whilst these payments continue they should be used to support the provision of temporary accommodation.

2.4 To instruct the Head of Housing to explore the options for acquiring property for use as temporary accommodation and bring forward a further report on the feasibility and funding for this option, including information on how such an approach could support the housing market.

3 CONSIDERATIONS

Background

3.1 The implementation of the Housing (Scotland) Act 2003; the Homelessness etc. (Scotland) Act 2003 and the Homeless Persons (Unsuitable Accommodation) (Scotland) Order 2004 have extended the range of duties that the Council has in respect of applicants who apply as homeless.

3.2 In summary these are to provide interim accommodation for an applicant where there is reason to believe they are homeless. This duty continues until the Council has completed the investigation of the case and discharged the duty owed to the household. For an applicant who is assessed as homeless, in priority need, unintentionally homeless and with a local connection to Stirling, the temporary accommodation duty will continue until the Council has made two reasonable offers of permanent accommodation.

3.3 This process currently takes an average of 231 days. Applicants who do not have a right to a permanent housing through the homelessness legislation are entitled to accommodation for a reasonable period to allow them time to find somewhere to stay. They are also entitled to free advice and assistance to help them to secure accommodation.

3.4 The abolition of the priority need test by 31 December 2012, with an interim target to assess 81% of homeless people as being in priority need by 31 March 2009, has increased the number of applicants that the Council has a duty to provide both temporary and permanent accommodation.

The supply and level of demand for temporary accommodation

3.5 During 2008 the Housing Service working with BT&T carried out a full and detailed analysis of the demand for and cost of temporary accommodation and the profile of homeless applicants. This work was supplemented with additional analysis and consultation with service users during the first quarter

of 2009. Five copies of the report of this work have been placed in the members lounge.

3.6 The table below sets out a snapshot of the number of clients in temporary accommodation by type as at 31 March 2009. This represents a typical snapshot of the current level of demand and use of the range of accommodation. The total has risen by just over 35% since the same date last year when 187 clients were in temporary accommodation.

Table 1: Temporary accommodation by type and usage 31 March 2009 Dispersed Tenancies Leased Hostels B&B Total Number of clients 55 45 66 88 254 Voids 4 3 0 7

3.7 The cost of each type of temporary accommodation including loan charges, voids, refurbishment and repairs and the support and supervision required is set out in the table below. Bed and breakfast (B&B) accommodation is provided through an existing supply contract that covers a very limited number of places from proprietors who were prepared to tender for placements. The great majority of B&B placements are “spot purchased” at higher rates though it should be noted that the recent capping of the cost of this sort of provision has significantly reduced cost. The impact of these changes is discussed below.

Table 2: cost of temporary accommodation 2007/08 (Excludes Hostel Support Grant) B&B B&B Non- Dispersed Tendered tendered Lets Leased Hostels Unit Cost per £18,877 £29,983 £12,308 £15,009 £15,379 annum Unit Cost per £296 £398 £66 £124 £117 week

3.8 It is clear from these figures that dispersed lets from the Council’s own stock are significantly better value than any other form of provision but that leased properties can also offer significant savings to the Council.

3.9 The current level of use of B&B establishments presents the Council and its partners with two significant issues. Firstly, the unsuitability of B&B as an accommodation option for homeless households and secondly, the high cost to the public purse.

3.10 Communities Scotland’s Regulation and Inspection Report on the Council’s Homelessness Service (2005) stated, “the Council’s provision of temporary accommodation alternatives to bed & breakfast is inadequate”. Progress was made to increase the number of units of temporary accommodation and there was a reduction in the use of B&B. However, since June 2007 the escalating number of homeless applicants, the current economic climate and the increased time that applicants spend in the homelessness system has put the Council’s portfolio of temporary accommodation under growing pressure.

3.11 Following a significant overspend on the cost of temporary accommodation in 2008/09 the Council allocated an additional £670,000 to fund the cost of increased demand for temporary accommodation. However, if action is not taken to increase the availability of alternatives to B&B in the short term it is likely that the increase in demand for temporary accommodation will result in either a further significant overspend or a failure on the Council’s part to fully meet its statutory duties to homeless applicants.

Recent actions to reduce the cost of temporary accommodation

3.12 Over the past year the Housing Service has taken a number of actions intended to both reduce costs and increase the availability of alternatives to B&B. These include:-

• proposals to convert the former school at Holy Trinity to provide 10 units of hostel accommodation. A contract for this work has now been let and the accommodation will be available for use by the end of December 2009;

• launching a private sector leasing scheme in February 2009 with a view to increasing the number of properties leased from private landlords by 50 up to 31 March 2010 and a further 50 properties in the following year;

• negotiating lower rates with B&B operators. This has resulted in a reduction in the cost of an average B&B placement from over £50 per night to £40. As a result the cost for the majority of non tendered B&B has dropped from £350 to £280 per week;

• agreeing the provision of new dispersed lets from registered social landlords (RSLs). Three local RSLs have agreed to match the level of dispersed lets provided within the Council stock of 0.5%. This will secure and additional 3 dispersed lets during 2009/10; and

• discussions are underway with Clackmannanshire and Falkirk Councils about the joint procurement of a number of services including B&B and furniture removal and storage.

3.13 These actions should add over 60 new units of directly provided accommodation over the next 12 months. However, this will not be sufficient in the short term to avoid significant pressures on the temporary accommodation budget and would still leave a significant number of homeless applicants in unsuitable and expensive accommodation in the short term.

3.14 Under current proposals up to 30 properties that are in use in the regeneration areas of Cultenhove and Cornton are about to be decommissioned, ready for demolition in August/November. The demolition of these properties will, in the current circumstances, impact on attempts to reduce the use of B&B and add significantly to the cost of temporary accommodation in the medium term.

Further steps to reduce the use of bed and breakfast accommodation

3.15 With over 80 applicants in B&B, there is an urgent requirement to bring more temporary accommodation into use. The service is currently developing a strategy and service model to address this issue. Options currently being explored include:-

• delay the demolition of the properties in the regenerations areas for as long as possible to ensure that the impact of the loss of this stock can be managed effectively;

• increase the numbers of dispersed lets, by using a number of vacant properties as they become available during the course of the year, and through purchase from the open market. It is anticipated that an increase of 30 units in this current financial year would be required to reduce the dependence on B&B. Appendix 1 to the report provides information on the priority areas for acquisition and the process that is followed prior to a property being brought into use;

• allocate at least one property in each of the proposed Council new build developments for use as temporary accommodation;

• develop a new model of mid rent accommodation including support suitable for single person households looking for medium term accommodation (up to two years);

• develop an interim accommodation model for those clients for whom fully independent accommodation may not be suitable;

• develop a high support needs hostel for those in need of more intensive support and supervision; and

• work with Clackmannanshire and Falkirk Councils to explore the possibility of developing specialist services for clients with more challenging behaviours.

3.16 The option to purchase some property on the open market using prudential borrowing could also provide an opportunity to assist in stimulating both house building and housing moves locally. Purchases targeted at stalled sales "chains" could free up sellers to purchase new build properties or move within the second hand market. Properly managed, this approach could serve wider policy objectives whilst meeting the demand for additional temporary accommodation. A full examination of the feasibility of the option including the financial implications, market benefits and risks will be prepared for consideration by the Council later in the year.

3.17 In the short term the immediate priority will be to reduce the level of use of high cost accommodation options and to ensure that the overall cost of the service is kept within the 2009/10 budget provision.

3.18 The table below sets out the targets for the overall provision of temporary accommodation by the end of March 2010.

Table 3: Estimated change in temporary accommodation from 31/3/09 to 31/3/10

Proposed No of units number of Comments Type in use units by 31 2008/9 March 2010 Dispersed 59 89 Demolition of Gateside Road, St. Ninians delayed

30 additional units to be acquired from council stock and through purchase from the open market Leased 48 98 Additional 50 leased properties; may need to be revised downwards as response has been slow. Hostels 66 76 Holy Trinity completion by end December Bed and breakfast 88 42 The total supply of temporary Total 261 305 accommodation includes an estimate for increased demand.

Addressing the support needs of homeless applicants

3.19 As part of the work to update the 2008 work on temporary accommodation requirements an analysis of the support needs of current applicants has been carried out. Support needs were found to vary across homeless clients. The chart below shows that whilst nearly 70% of clients have medium to low support needs, for 10% of the group, that is up to 25 clients based current demand, have medium high or high support needs.

Table 4: Customer Support Needs: 1 November 2008 to 31 January 2009

Customer Support Needs

3% 7%

Low 24% 42% Low - Medium Medium Medium - High High

24%

3.20 The categorisation of levels of need is broad brush but typically low support needs would include help completing benefit or housing application forms. Medium high and high support needs will involve more than 3 hours contact each week and a requirement for a degree of supervision to ensure appropriate behaviours are adopted in temporary accommodation. This could include door control and relations with and behaviour towards other residents.

3.21 All homeless applicants now have support plans prepared for them and allocations to temporary accommodation are made taking account of these plans. This ensures that concentrations of vulnerable clients are avoided or that they are placed where they are most likely to receive the assistance they need.

3.22 The existing team of 3.5 FTE support workers each has a caseload of up to 30 clients. Demand for support services has increased over the last year, this trend is likely to continue as clients are moved to more dispersed accommodation options and the use of B&B is reduced.

3.23 In the light of this, the service is exploring options for developing a specific high support needs service within the existing accommodation portfolio. This will include examining the options for returning the service to a full 24 hour waking shift pattern to ensure that higher needs clients are properly supported and helped to move on from more chaotic life styles.

3.24 This is likely to require an increase in the number of employees providing support for clients. A move out of B&B in the medium term will ensure that the resources are available to fund any additional posts.

3.25 The review of temporary accommodation and support needs set out in the temporary accommodation strategy report, identifies a wide range of issues to be addressed in the medium to long term. However, the rapidly changing environment and growing pressure on temporary accommodation means that measures are needed to provide accommodation in the immediate future.

3.26 In the medium term it will be important that the Service moves to recruit additional support and accommodation management staff to ensure that the new accommodation is effectively managed and that clients receive the support they need to establish sustainable settled housing solutions. The resources allocated through the 2009/10 budget process will be sufficient to ensure this provided that a significant reduction in the use of B&B can be achieved during this year.

3.27 In the medium term further consideration will have to be given to meeting the requirements of those clients with higher support needs. The development of some joint working with Clackmannanshire and Falkirk Councils may provide further options to address these issues in the future.

Meeting the cost of temporary accommodation for homeless applicants

3.28 The Service will develop a long-term business plan for homelessness services, similar to that in place for the mainstream housing stock.

3.29 A review of the current arrangements has identified that it is difficult to identify the cost of homelessness services. This is an unsustainable situation, particularly in relation to the temporary accommodation. It is essential that the Service is able to identify the true cost of each type of accommodation and ensure that the income is sufficient to cover costs. To address this situation, it is proposed that the service moves to a full cost recovery approach for homeless accommodation.

3.30 A full cost recovery approach would see the weekly rent charge to service users being set at a level to recover the weekly cost of the accommodation, together with all staff costs associated with the management of the accommodation, and an allowance for bad debts etc. The rent would be set at a level to allow the service to break-even.

3.31 The Council currently receives Hostel Support Grant, to assist it to meet the difference between the running costs of the hostel accommodation and the rental income. A decision to move to a full cost recovery approach will remove the shortfall and result in an end to the grant award. It would be anticipated that the final payment would be made in April 2010. The grant payment would be for approximately £300,000. Agreement is sought to use this final payment to support the provision of temporary accommodation, for use as dispersed lets.

3.32 The temporary accommodation would be held on the Housing Revenue Account. An annual charge would be made to the homeless accommodation general fund account.

3.33 Any acquisitions made by the Housing Revenue Account for use as temporary accommodation would be charged at a level to recover all its costs and to reflect the value of the asset. The properties would be funded through prudential borrowing. The HRA business plan and the proposed Homeless accommodation business plan will demonstrate that the approach will have a nil net impact on the rents of mainstream Council tenants.

3.34 It is anticipated that the full cost recovery approach will bring about a significant increase in the weekly rent charged to service users. However, the charge is eligible for full housing benefit and efforts would be made to ensure that service users who did not have an entitlement to full housing benefit had access to income maximisation advice.

3.35 The cost of temporary accommodation is set to rise, as the numbers in the system increase. The proposal is to move to a full cost recovery approach to allow the service to manage an increase in the number of properties in management. This will enable the service to reduce the use of B&B and the impact on the general fund.

3.36 The temporary accommodation strategy will need regular review to ensure temporary accommodation is available throughout the Council area and that applicants and the broader community are provided with the quality of service they are entitled to expect.

4 POLICY/RESOURCE IMPLICATIONS AND CONSULTATIONS

Policy Implications Diversity (age, disability, gender, race, religion, sexual orientation) Yes Sustainability (community, economic, environmental) Yes Corporate/Service (corporate plan, service plan, strategic aims, existing Yes policies or strategies, new/amended policy or strategy) Risk Yes Resource Implications Financial Yes People Yes Other (land, property, electronic etc.) Yes Consultations Internal and External Consultations Yes

Policy Implications

4.1 The recommendation to increase the use an additional 30 Council houses as temporary accommodation will reduce the number of properties available for permanent use. This will impact on applicants on the housing list.

4.2 The recommendation includes a proposal to acquire properties on the open market. A detailed policy will be required to develop this proposal.

4.3 The strategy demonstrates that the Council is committed to meeting its statutory duty to homeless people.

Resource Implications

4.4 Resources to meet the cost of the accommodation and the staff have been identified within the budget.

4.5 The proposal to move to a full cost recovery approach will allow the Council to meet its statutory duties for homeless accommodation within the budget allocated.

4.6 The Council will lose Hostel Support Grant, as the rent charged for the property will be sufficient to cover the costs incurred. The grant is paid in arrears and it is proposed that the final payment will be used to acquire accommodation for use as dispersed lets.

Consultations

4.7 The Housing Advisory Group.

5 BACKGROUND PAPERS

5.1 Communities Scotland Regulation & Inspection Report 2005.

5.2 Improving outcomes for homeless people, Stirling Council: 31 January 2008.

5.3 Allocations Review, Housing Advisory Group: 30 May 3008.

5.4 Progress Report: Improving outcomes for homeless people, Stirling Council: 11 December 2008.

5.5 Stirling’s Homelessness Partnership: Temporary Accommodation Strategy, report prepared by Sheenagh Simpson, Consultant: April 2009.

Author Name Designation Tel No/Extension

Simone Greenshaw Homelessness Services 01786 477551 Manager

Approved by Name Designation Signature

Tony Cain Head of Housing

Date 29 May 2009 Reference REP1016SC(SG)

APPENDIX 1

1. Priority areas for future temporary accommodation

Temp Allocation Area Temp Acc Households Household Social Rented stock accom Pressure in temp to temp equivalent Ratio Previous ratio to % of (PAS) permanent SC RSLs Social address Total Rented stock St. Ninians Cultenhove 25 11 1:4 497 35 532 4.6% 5:1 St. Ninians - Lower 12 6 1:13 144 10 154 7.7% 12:1 St. Ninians – Newpark 2 2 0 10 40 50 4.0% 27:1 St. Ninians – Mayfield 0 2 0 124 1 125 0 3:1 St. Ninians – Polmaise 0 6 0 224 6 230 0 6:1 St. Ninians - Newhouse 0 1 0 10 - 10 0 16:1 Stirling Town 59 33 1:6 274 91 365 16.1% 100:1 Riverside 11 4 1:1 28 57 85 12.9% 12:1 Braehead 33 6 1.5 240 16 256 12.8% 23:1 Broomridge 0 4 0 37 - 37 0 15:1 Cambusbarron 0 5 0:1 134 37 171 0 20:1 1 17 12:1 252 21 263 0.3% 6:1 Whins of Milton 2 5 11:0 312 41 353 0.5% 5:1 Hillpark/ Firs 0 0 0 134 - 134 0 5:1 Cornton 7 8 1:1 384 74 458 1.8% 5:1 Causewayhead & Logie 0 1 0 32 - 32 0 51:1 4 2 1:3 141 - 141 2.8% 44:1 Town 3 1 1:1 151 - 151 1.9% 12:1 Rylands & Whitecross 0 1 0 63 - 63 0 10:1 0 1 0 3 - 3 0 100:1 Fallin 3 15 4:1 422 44 466 0.6% 4:1 0 0 1:1 24 - 24 0 2:1 Cowie 2 11 2:1 383 32 415 0.4% 2:1 1 1 6:1 287 - 287 0.3% 2:1 Raploch – Scott 1 7 12:1 346 23 369 0.2% 7:1 Raploch – Craighall 4 3 2:1 180 31 211 1.8% 5:1 Raploch - Glendevon 0 4 0 14 28 42 0 7:1 Raploch – Ferguson 0 10 0 295 11 306 0 1:1 0 0 0 58 - 58 0 9:1 0 1 0 37 - 37 0 13:1 0 0 0 10 - 10 0 100:1 2 1 1:1 109 38 147 1.3% 16:1 0 0 0 22 40 62 0 74:1 & Arnprior 2 1 0 56 41 97 2.0% 19:1 0 0 32 11 43 0 17:1 Thornhill & 0 Blairdrummond 0 0 21 - 21 0 11:1 0 1 0 5 - 5 0 100:1 0 0 0 46 - 46 0 20:1 2 1 0 59 10 69 2.8% 8:1 0 0 0 31 16 47 0 21:1 0 0 0 13 - 13 0 100:1 0 0 0 7 - 7 0 11:1 2 4 0 154 91 245 0.8% 6:1 /Aberfoyle 0 2 0 47 64 111 0 13:1 & 0 0 0 34 41 75 0 7:1 Balquidder, & 0 0 0 11 37 48 0 5:1 & 0 0 0 19 30 49 0 5:1

Source: Homelessness Services - Oct 2008 Note : SC Housing Stock as at Jan 2009 RSL Housing Stock – Jan 2009 Pressure Ratio from PAS - Oct 2007

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2. Strategy for Identification of Homeless Lets

1) Dispersed lets should run for a minimum of 4 years, to achieve diversity of 2) provision and Best Value. 3) When new let identified - Accommodation Manager consults with local member 4) to discuss suitability and management arrangements. 5) When agreement is reached with local member, Accommodation Manager, 6) local office and local member arrange consultation with neighbours to explain 7) processes and management arrangements. 8) Reviews to be instigated by the Accommodation Manager 6 months prior to 9) actual review date to allow local team opportunity to identify a replacement. 10) Accommodation Manager issues Local Office, local member and surrounding 11) neighbours a questionnaire to identify any issues which have arisen 12) throughout the period of the let. 13) Accommodation Manager to co-ordinate responses. 14) Accommodation Manager to liaise with Local Office taking into account 15) comments from questionnaire in identifying new let.

Source: 18/11/99 Care Committee Note: private leased and properties to be acquired would follow same process