Housing associations have cut plans to build homes for vulnerable, elderly or disabled residents by 85% because of concerns over proposed welfare changes, according to an investigation.

A survey of 69 housing associations representing a third of sheltered housing in England found dozens of schemes for new housing either postponed, cancelled or facing closure, a drop from 8,800 to just 1,350 homes.

Housing schemes facing closure or postponement include homes for war veterans adjusting back to civilian life and supported living for people with learning disabilities to help them live independently. The changes could also apply to secure housing for domestic violence victims.

The National Housing Federation (NHF), which conducted the survey, said schemes were threatened by uncertainty over planned changes affecting housing benefit for supported accommodation.

Around two-thirds of housing associations contacted said they had decreased their development plans. Almost four in 10 said they had postponed new developments, one in 10 had cancelled new developments, and 7% planned to close existing schemes between now and 2019.

Riverside, a scheme for homeless veterans in Colchester is among those currently stalled. The association’s executive director of care and support, John Glenton, who gave evidence to parliament on the proposed changes, said the uncertainty over the future of the funding had led to the scheme’s postponement.

“While this uncertainty over funding continues, a question mark hangs over development plans which would support some of society’s most vulnerable people,” he said. “Along with other landlords, we urge the government to resolve this quickly.”

The government has proposed capping benefits for those living in supported and sheltered housing to match the housing benefit tenants receive if they rent from a private landlord.

Critics say the rates, known as local housing allowance, would create a “postcode lottery” and have no relationship to the cost of proving specialist housing support. Additional costs are supposed to be met by local councils but providers have said the details for this provision have so far been vague.

Last May, a joint parliamentary committee called on the government to scrap the plan, warning the proposed changes “could lead to a serious shortfall in the availability of supported housing”. A green paper, expected to detail the proposals, was due before the summer but has now been postponed until the end of autumn.

Of the 69 housing associations surveyed, the report found:

71 new schemes, representing 2,185 homes, had been postponed.

19 new developments, totalling 803 homes, had been cancelled.

22 existing supported schemes and three sheltered schemes, amounting to 132 homes, were facing closure.



The chief executive of the NHF, David Orr, said the planned changes to funding were directly preventing the building of homes for the most vulnerable and that the government had “failed to heed warnings”.

“With social care in crisis, the role supported housing plays in alleviating pressures on the NHS is ever more important,” he said. “These changes have not even come in yet and they have taken 7,000 homes for vulnerable people out of the pipeline.

“The proposed changes in funding bear no relation to the real cost of providing this type of housing. It is time government put supported housing on a secure and sustainable footing.”

Labour’s John Healey, the shadow housing minister, called on the government to scrap the changes. “This is a damaging and short-sighted policy proposal which ministers have already been forced to delay and then amend under pressure from Labour and housing organisations,” he said.

“Before the damage gets any worse, ministers must halt these crude cuts and work with the housing sector to produce a new plan to put supported housing on a sustainable footing.”

A Department for Work and Pensions spokesman said the department valued the role of supported and sheltered accommodation. “We have consulted fully on the new model and have been clear we will set out the next steps soon so that the supported housing sector has the certainty it needs to deliver in the future,” the spokesman said.