Communities Equality and Human Rights Housing

What next for the proposed £250 million a year ‘mega grant’?

Last year the Welsh Government proposed to merge a range of housing and non-housing related grants currently provided to local authorities into a larger, single grant. The proposed ‘Early Intervention, Prevention and Support (EIPS) Grant’ would include funding for flagship programmes such as Supporting People, Flying Start, Families First and Communities for Work Plus.

14 August 2018

Darllenwch yr erthygl yma yn Gymraeg | Read this post in Welsh

Last year the Welsh Government proposed to merge a range of housing and non-housing related grants currently provided to local authorities into a larger, single grant. The proposed ‘Early Intervention, Prevention and Support (EIPS) Grant’ would include funding for flagship programmes such as Supporting People, Flying Start, Families First and Communities for Work Plus.

The aim is to reduce administration costs to help deliver ‘efficiency savings’ of £13 million a year, and allow local authorities to “work differently, giving more scope to design services to support a far more joined up, preventative, long-term approach to delivering for the most vulnerable in society”.

Cymorth Cymru and other housing organisations criticised the move, stating that “funding currently ring-fenced for homelessness and housing-related support services for marginalised groups could be lost to more politically popular services within the proposed EIPS grant such as early years, health visitors and childcare.”

Inside Housing recently reported that the Welsh Government was “undertaking work to understand how a separate grant focusing only on housing-related services might meet the aims of [its] grant integration work”.

The proposal

The Welsh Government proposes to merge ten grants currently provided to local authorities into one larger, single grant of around £250 million. The existing grants range from childcare to youth justice, and homelessness to employability:

a diagram listing the ten grants to be merged into one grant

The original proposals in the draft budget 2018-19 included three other grants, which were removed in later plans. The grants were: funding for violence against women, domestic abuse and sexual violence services, community cohesion and the National Advocacy Service.

Pathfinder areas

In 2018-19, the new funding structure has been trialled in two ways:

  • seven ‘pathfinder’ local authorities have been given 100% flexibility across all ten grants, and
  • the remaining 15 local authorities have been given 15% flexibility across five grants (Supporting People, Flying Start, Families First, Communities First Legacy and Communities for Work Plus).

Efficiency savings

The draft budget proposals (published in November 2017) allocated £252 million for the proposed new single EIPS grant in 2019-20. This includes a £13 million reduction compared with the separate grants in 2018-19.

When questioned by the Equality, Local Government and Communities (ELGC) Committee on the evidence base for how much could be saved in administration costs by merging grants, the Leader of the House said it was the Government’s ‘working assumption’ that 10% savings could be made by reducing administrative costs, without making cuts to services.

This assumption was based on the Wales Audit Office report, Grants Management in Wales, which states “administration and management costs are shared between funders and recipients and typically amount to at least 10 per cent of funding”, but also that “there are some risks inherent in any loosening of the controls over the spending of grant funding”. ‘Administration costs’ fund activities such as application processes, promotion, consultations, monitoring and evaluation of schemes.

Assembly scrutiny

The ELGC Committee made a range of recommendations about the proposals in its report (PDF, 1.9MB) on the draft budget 2018-19, including:

  • committing to reinvesting the proposed £13 million in efficiency savings back into the Early Intervention, Prevention and Support Grant;
  • taking steps to ensure that any efficiency savings made from 2019-20 onwards will not lead to a reduction in services;
  • outlining the evidence base and rationale for the decision;
  • detailing what outcome monitoring is in place to ensure that de-hypothecation does not lead to vulnerable people falling through the gaps in services;
  • ensuring that housing and non-housing related services funded from the Grant have some level of ringfencing, and
  • ensuring the new Fund is transparent by committing to collating and publishing details of the exact services, in particular services that will address homelessness,  that will be funded in each Pathfinder local authority in 2018-19.

The Government’s response (PDF, 338KB) stated:

No final decision has been made on the creation of an EIPS grant in 2019-20. However, if Ministers do decide to go ahead it will still be a ring fenced grant with funding protected for use only within the criteria set out for the new grant, which would be monitored closely. It is absolutely vital that services for vulnerable people are protected and we are committed to ensuring funding that supports non-statutory preventative services is protected.

In May 2018, the Assembly’s Public Accounts Committee highlighted (PDF, 528KB) that while “there may be scope to better integrate grant programmes to achieve better outcomes, we have serious reservations about the way the proposals for the new integrated grant were developed and announced in the fine detail of the Welsh Government’s budget proposals.”

The report also highlights that there remains “a number of significant shortcomings with the governance and management of the Supporting People Programme.”

What does the sector think?

Several organisations including Cymorth Cymru, Welsh Women’s Aid and the Chartered Institute of Housing (CIH) expressed concern about the approach, particularly its impact on housing-related services.  They consider that it will:

  • Risk diluting the focus on homelessness – as the grants included vary greatly – from Supporting People to youth justice to childcare –there is a danger that expertise will be lost, and the outcomes framework, guidance and commissioning will not be focused on homelessness;
  • Lead to funding being spent on more locally popular schemes – stakeholders argue that if the grant was no longer ring-fenced, critical schemes for vulnerable people which are less popular at a local level (such as supported accommodation schemes for care leavers, people with mental health problems and people fleeing domestic abuse) are at greater risk of cuts than funding for childcare or employability schemes;
  • Provide less certainty for landlords and lenders, which could lead to less investment in supported accommodation schemes;
  • Existing partnerships – stakeholders argue that one of the aims of the EIPS is to make grant schemes work better together, but they argue that “Supporting People commissioners, landlords and providers already work well with commissioners and providers of other grants and funding streams”, and
  • Evidence from England – the report notes that the removal of the ring-fence from Supporting People funding in England has had a ‘devastating impact’ on many homelessness and housing-related support services. A report from the National Audit Office in 2014 highlighted average spending reductions on housing-related support services in England of 45% between 2010-11 and 2014-15.

A middle way?

In June 2018, stakeholders in the housing sector suggested a new funding solution, which merges all homelessness and housing-related funding together in one grant, and all non-housing related funding into another:

a proposed new structure for the grant mergers, which separates housing-related grants from childcare, employability etc.

What now?

On 2 August, Inside Housing reported that the Welsh Government was undertaking ‘scoping work’ for a new housing-related services grant as an alternative to the original proposals, but stated that “no decision has yet been made on the future of a potential single grant”. The Welsh Government website also states that it is commissioning an independent evaluation in 2018-19 to help inform the decision.

Article by Hannah Johnson, National Assembly for Wales Research Service
Image sources: Cymorth Cymru, Housing Matters 2018

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