This August, we submitted our response to the Government’s Fair Funding 2.0 consultation.
This consultation forms a large-scale review of the hows and whys of local government finances, working towards the ultimate goal of simplification. The questions reflected a broad overview of the messy world of local authority funding arrangements, including how need is calculated, how money is allocated and how local authorities work with others to distribute funds.
Given our previous work with campaigns like Breaking the Cycle and Keep Our Doors Open, alongside our ongoing work to support the development of the Supported Housing (Regulatory Oversight) Act, our ears pricked up at the discussion of local government finance.
The consultation contained 34 questions covering all aspects of local authority finance arrangements. Our response, which is linked below, was focused only on those that seemed most directly relevant to the problems we have long supported members to champion. These include:
- Potential simplification of the complex grant landscape;
- Commissioning practices that enable effective joint working;
- The ability of councils to meet the cost of temporary accommodation and keep up with local need;
- The need for longer-term financial settlements;
- Protecting providers from financial risks caused by local government reorganisation.
Overall, we are very pleased to see that ministers are looking at the machinery of local government finance and are exploring a change to the status quo. This is long overdue for our sector where patchwork funding and a lack of strategic spending has seen services pushed into decline while rates of homelessness have risen.
Using evidence from the many, many conversations about funding that we have had with you in recent years, we made the case for the needs of the sector, outlining how reforms could solve problems including:
- Homelessness funding pressures: fairer funding arrangements could address funding shortfalls, where providers’ income streams have remained largely static despite the consistent increases to core costs and rates of homelessness.
- Race-to-the-bottom competitive tendering: tendering practices form a key aspect of funding allocations, and the consultation is an opportunity to reset practices where contracts are awarded based on who can offer the lowest price rather than value-for-money.
- Reset to a single, ringfenced fund to end homelessness: the simplest grant landscape would be one where funding is consolidated to one support-focused fund, inclusive of existing grant schemes, Enhanced Housing Benefit, and other homelessness-related spending across departments.
However, there were also points in the consultation that raised our eyebrows, meaning we also fed back on:
- The lack of action on gaps in funding for supported housing: reforms once again overlook supported housing, where many providers do not technically receive funding for the cost of support itself, leaving them exposed to huge risk under the Supported Housing (Regulatory Oversight) Act.
- Risks of funding temporary accommodation separately: moves to separate statutory and non-statutory service funding could hold positives, but also mean the risk that single homelessness funding drops even further as local authorities pull resources inwards.
Overall, the consultation points to a step in the right direction and could answer many of the issues that you have shared with us in recent years. However, there are key details that must be worked out before it is fit for purpose, and we will update you further with any other work we do to collaborate with Government to get this right.
For further information on this submission or Homeless Link’s policy work, please contact Sophie.boobis@homelesslink.org.uk.
