Homelessness prevention: business and regulatory impact assessment

Sectors and groups affected

Option 1 (do nothing) – Benefits

If the Scottish Government does not introduce the legislative change, there will be no need to provide training to staff, as homelessness staff at local authorities already deliver a crisis response to people who are statutorily homeless, and this would continue, as part of their existing duties. There would be no need to produce further guidance for local authorities, or new guidance for relevant bodies, which would mean no additional resource/asks of Scottish Government policy teams or of stakeholders to contribute to the development of such materials. There would be no additional asks of relevant bodies as they would not be required to do anything in respect of preventing homelessness, if this was not already within their remit. No changes would be required to IT systems or procurement and commissioning of services.

Additionally, there will be no need to resource training leads or strategic leads as sought in the HPSG Homelessness Prevention Task and Finish Group Report,^[17] and no need for additional staff within relevant bodies and/or local authorities. It will be ‘business as usual’ which would not present any more of a financial burden on the public purse aside from potential increase in demand for services over time which might occur in any case.

Option 1 (do nothing) – Costs

Current homelessness legislation provides strong housing rights for people that are homeless, but it is less robust with regards to preventing homelessness, leading to an unintended emphasis on crisis response. This also means that a significant reliance on temporary accommodation remains in place. This increases the overall cost to public services^[18] and the risk to the household of negative long term outcomes continues. While local authorities are currently required to provide advice and information with the aim of preventing homelessness and to take measures for people under threat of homelessness, specific actions to prevent homelessness are based on good practice rather than legal requirements. There is no legal driver to influence early intervention, joint working between services to prevent homelessness, resourcing or culture change.

Without creating a more level playing field between crisis response and prevention which clearly sets out the requirements for the latter, local authority approaches may continue to be inconsistent and influenced by a desire not to be seen as ‘gate keeping’ i.e. stopping people realising their rights as a homeless household, by undertaking prevention activity. This would be detrimental to achieving a person-centred approach to prevention and not within the spirit of the PRG recommendations. The responsibility to prevent homelessness is not shared with relevant bodies beyond housing services, and so opportunities to prevent homelessness (and the long term impacts thereof) continue to be missed. More people who are at risk of homelessness ultimately become homeless and are owed a statutory duty as a homeless household.

Option 2 (updated guidance / no legislation) – Benefits

Instead of introducing new legislation, we could update only the existing Code of Guidance which applies to local authorities to set out the expectations around prevention, including the need to consider preventative action in all households who are at risk of homelessness. Updating the Code of Guidance may increase preventative action taken by local authorities to support households at risk of homelessness. There would be no change to the obligations of relevant bodies beyond housing services and so no additional costs would result for them.

Updating guidance (even statutory guidance) rather than changing or bringing in new legislation would mean that prevention activity would continue to be delivered in certain areas as good practice, as is currently the case. Although not currently legislated for, we know that some bodies who are not responsible for preventing homelessness already do assist people at risk of homelessness with support where they can or refer to local authorities where appropriate. Producing guidance for relevant bodies might shine a light on homelessness and encourage prevention activities even if not legally required.

Creating new guidance for relevant bodies might increase awareness of homelessness amongst bodies not ordinarily concerned with preventing homelessness and might impact on levels of homelessness.

As resources are limited, this might yield some quick wins at little added cost however this approach may not result in sustained long term changes.

Option 2 (updated guidance / no legislation) – Costs

Existing legislation remains as currently written but the Code of Guidance (which applies to local authorities) is updated to set out the expectations around prevention, including the need to consider preventative action for all households who are at risk of homelessness. This would not go as far as requiring preventative steps to be taken and so, in times of limited resources, may drive behaviours away from prevention activity towards crisis response. The rights for homeless households would not change and there might be little or no impact on rising levels of homelessness in Scotland.

This may create a system where there is an overall increase in cost to public services, but there is no legal driver to influence resourcing or culture change.

Not introducing legislation would mean that the responsibility to prevent homelessness is not established as a legal duty for relevant bodies, beyond housing, which would be a missed opportunity to prevent homelessness and the associated trauma. More people who are at risk of homelessness ultimately become homeless and are owed a statutory duty as a homeless household.

This option is likely to be met with significant objection from stakeholders, who have already raised concerns about the balance between the use of legislation and guidance to deliver the prevention of homelessness duties overall.

Option 3 (Legislative change) – Benefits

Changes are made to current legislation to provide a basis for local authorities to assist households who are threatened with homelessness earlier. The additional time will allow for considerations of household need and preference in a way that crisis response cannot. The changes to legislation will also ‘re-balance’ the system to put preventative steps on an even footing with crisis response so that the service a household receives is appropriate to their needs i.e. at risk of homelessness or homelessness. This will protect the strong housing rights for people who are homeless in Scotland and will recognise the benefits of early intervention and prevention of homelessness while providing clarity to practitioners on what is appropriate prevention activity and when it is appropriate to take a homelessness application. The 2014 report from the Scottish Housing Regulator^[19] on the person centred, but non-statutory, ‘housing options’ approach to prevention in Scotland in recent years, highlighted the need for clarity on these issues.

The new legislative provisions will extend the need to prevent homelessness to relevant bodies who may come into contact with people who are at risk of homelessness, by requiring them to ask about a person’s housing circumstances and then to take actions (within their own powers) to prevent homelessness. This is known as the ‘ask and act’ duty and, by applying it to relevant bodies, early identification of risk and mitigating actions will be possible. The legislation will also require any referrals made by relevant bodies to local authorities to be taken as an application for assistance, which will give the referring body the reassurance that action will be taken following their intervention.

For households, it is more likely that vulnerability to homelessness might be identified earlier, support provided and homelessness averted, which decreases possible trauma, indignity and improves quality of life.^[20]

Scotland has a much higher rate of homelessness acceptances (around 11 per 1,000 households each year) compared to England and Wales. Scotland also has stronger rights to housing for people assessed as being unintentionally homeless than the rest of the UK, but the legislative framework around prevention of homelessness is less robust. The purpose of the changes being introduced as the homelessness prevention duties is to ensure homelessness is prevented wherever possible to avoid the trauma and disruption it can cause to the lives of families and individuals, while ensuring existing rights to accommodation for homeless households in Scotland are maintained.

This means that direct comparisons with other parts of the UK and indeed, internationally, are not always appropriate or possible. However, consideration has been given to the implementation of similar duties in England^[21] and Wales^[22] in recent years. For example, it is the purpose within Scotland’s approach to ensure that relevant bodies ‘act’ within their own powers to help prevent homelessness (and refer to local authorities where necessary), which goes further than a duty to refer or a duty to co-operate which exists in other parts of the UK. Our aim is to establish a shared public responsibility around prevention of homelessness in legislation rather than to endorse an assumption that only local authorities’ housing departments can prevent or address homelessness.

Option 3 (Legislative change) – Costs

The following section is broken down into best estimated costs for local authorities, Scottish Government and relevant bodies and social landlords. The full details of how these costs have been derived are set out in the Financial Memorandum.^[23]

It is anticipated that the most significant costs resulting from the homelessness prevention measures will accrue to local authorities, with increases in case volumes requiring more staff (estimated at £1.6 million per year in Year 1^[24]; Year 2 and Year 3), and possible upgrades to IT systems (estimated at £200,000 in Year 1 and £200,000 in Year 2).

There will be one-off costs to the Scottish Government, such as for consultation and engagement with stakeholders (estimated as £30,000 for each of Year 1 and Year 2), development of national level training material (estimated at £25,000 in year 1 and £30,000 in Year 2), as well as costs of the two Scottish Statutory Instruments (SSIs) (approximately £1,230 in Year 2). There will also be recurring staffing costs across the Scottish Government and these are estimated at £215,936 in each of Years 1, 2 and 3.

There will also be new requirements being placed on relevant bodies to undertake a role that previously they may not have had. It is anticipated, for example, that relevant bodies may need to upgrade their IT systems (estimated at £343,750 in each of Years 1 and 2) and there may be recurring costs where relevant bodies need to recruit more staff. These are estimated at £343,066 in each of Years 1, 2 and 3).

Additionally, social landlords will likely see some increased costs associated with the introduction of the measures in the Bill. As social landlords, housing associations will be required to develop a domestic abuse housing policy, which may result in some costs. Housing associations may also have to recruit additional staff. Costs are estimated at £68,613 per year within a 3 year period.

Finally, third sector partners are likely to be critical to the successful delivery as, while the duties will not apply to them, some may be commissioned by local authorities or relevant bodies in the discharge of their functions while others will simply be the organisation that a person requiring support might feel comfortable approaching as opposed to a statutory body. As such it may be beneficial to the success of the prevention duties to provide financial support, even where there is no legal requirement to do so.