Housing Adaptations: Options for Change and Improvement - An Analysis of Consultation Responses

5 views on funding approaches

Introduction

5.1 Demand for housing adaptations is expected to increase as a result of the ageing population; increasing numbers of people with disabilities; the emphasis placed on using existing housing; and the continuing drive to reduce the use of institutional forms of accommodation. Increased levels of funding are likely to be required, whatever the organisational arrangements. There is also a need to put in place funding arrangements which, if possible, encourage ‘preventative’ provision of adaptations, enabling relatively low cost investment which would save money in the longer term.

5.2 The consultation outlined three potential funding approaches for delivering housing adaptations:

• Through the local housing authority;
• Through Health and Social Care Partnerships; and
• Through the Individual.

5.3 The local housing authority approach would build on the current arrangements for funding these adaptations as a housing sector responsibility. The health and social care approach would be based on adaptations being funded from the integrated budget managed by Health and Social Care Partnerships. Some allocation of housing resources would be included within the integrated budget. This would enable funding decisions to be made within a broader understanding of total expenditure on health and social care services. It would place any investment (expenditure) in adaptations within the context of potential savings.

5.4 For people with personal budgets under self-directed support arrangements, adaptations could form part of the support that they are able to purchase with these budgets. The individual requiring the adaptation approach focuses the responsibility for funding the adaptation on the individual. Overall, it would be important that in accordance with the Group’s principles for the delivery of adaptations, financial support would continue to be provided, taking account of ability to pay so that those who do not have personal resources would not be disadvantaged. For individual owners, there might be a removal of the 80% minimum and an expansion of grant levels between 80 and 100%, with greater use of loans and a greater expectation that equity within the property should be used to pay for adaptations. Alternatively, this might mean a new cross-tenure financial support mechanism could be established. This approach would also require investment in support so that the complexities associated with managing the adaptations budget and any personal contributions (as well as navigating the process more generally) do not act as a disincentive.

5.5 Three questions were asked in relation to funding approaches as follows:

Question 7: Which of the three approaches to funding (through local housing authority, Health and Social Care Partnerships or the individual) do you believe would provide the most effective basis for the delivery of housing adaptations and the greatest benefits to people who need adaptations? Why?

Question 8: Are there issues or risks with any of the three approaches to funding that are not covered above?

Question 9: Do you think we currently have the fairest arrangements for people, who have personal resources, including both income and equity in their current home, to contribute to the cost of their own adaptations? If you would like to see changes, what would these be?

Views on the three Funding Approaches (Q7)

5.6 Opinion was varied amongst respondents regarding the most effective funding approaches to deliver housing adaptations. The most common approach favoured by respondents related to the local authority taking responsibility (just less than 40% of respondents) followed by the Health and Social Care partnerships (just over one quarter of respondents) and a combination or mixture of approaches. Very few respondents (just 7%) felt that placing the responsibility on the individual for funding the adaptations would be the most effective approach.

Question 7a - Which of the three approaches to funding do you believe would provide the most effective and deliver the greatest benefits?
Approach	Number	%
Through the local housing authority	27	39
Through the Health and Social Care partnerships	18	26
Through the individual	5	7
Other / combination	14	20
Don’t Know / Blank	5	7
Total (n=69)	69	100

5.7 There was some variation by organisation as set out in the table below which sets out the responses by organisation type. The local authority funding approach was most popular amongst local authorities, occupational therapists and care and repair organisations and less popular amongst housing associations. The health and social care funding approach was most popular amongst other groups and housing associations; whilst the individual approach was most popular amongst other groups and representative bodies. That feedback from service users via the regional consultation events suggested that they did not have a particular preference with regards to funding sources as long as there was increased choice and sufficient funding (see chapter seven).

Question 7a - Views on funding approaches by respondent type (% of respondents)
Respondent Type	Local housing authority	Health & social care	Individual	Other / Through a combination	Don’t know / blank
Housing associations (n=22)	36	32	0	32	0
Local authorities (n=20)	55	15	10	15	5
Care and repair organisations (n=9)	44	22	11	22	0
Occupational therapists (n=6)	50	17	0	0	33
Other groups & repres. bodies (n=9)	0	56	22	22	0
Individuals (n-3)	33	0	0	0	67
Total	39	26	7	22	7

5.8 Where the respondent preferred the local authority funding approach, a variety of reasons were given. These include the historical experience and structures which are in place within local authorities to deal with different funding streams and a complex policy area such as this. This includes experience of cross-service and inter-agency engagement and collaboration as well as outcome monitoring and financial systems.

5.9 The point was also made that local authorities already have a strategic housing role, and through a local authority funding approach there would be close links with other housing funding and delivery streams and wider housing policy. Examples were provided of where this may be beneficial, including:

• The alignment of resources, for example, to establish a link between equipment and adaptations and a local authority’s asset management strategy.
• This would optimise the use of existing housing stock and maximise the effective matching of persons and properties;
• It would enable repairs to be delivered in tandem with adaptations; and
• It would provide a single point of contact for the client in relation to a variety of housing issues.

5.10 Other reasons provided include that it would enable an integrated funding pot for all adaptations across all sectors, which would result in priority given to the individual based on need not on funding availability. It may also enable some procurement savings where there are links to other elements of housing policy and funding. Finally, this approach would allow housing adaptations (which are mainly building related and site specific) to be dealt with by housing professionals rather than health and social care professionals.

5.11 Despite favouring a local authority approach, a number of the respondents stated that there would still need to be collaborative and flexible working with the health and social care sector (particularly in relation to preventative services) as well as focusing on the needs of the individual when taking funding decisions. In addition, some respondents mentioned the need for a ring-fenced funding pot in order that the funding is not lost within wider local authority budgets.

5.12 Where the respondent preferred the health and social care funding approach, reasons included:

• That it would allow for contributions through self-directed support and more personalised solutions for individuals and carers;
• This approach would enable a holistic assessment of the long term individual health/social care needs, including a potential evaluation of preventative or consequential savings; and
• Housing adaptations are health related and therefore should be funded through health budgets, especially as they may prevent other health related issues via preventative spend impacts.

5.13 Again, under this arrangement some respondents highlighted the need for a partnership approach, particularly in relation to the physical building works which would be undertaken. As with the local authority options, some also mentioned the need for a ring-fenced funding pot in order that the funding is not lost within wider health and social care budgets.

5.14 Far fewer respondents favoured the individual funding approach. Where this was preferred, the reasons provided mainly revolved around the approach most closely fitting with the principle that adaptations are for the benefit of the individual, should be based on their individual needs and the approach should fit with the self-directed support agenda.

5.15 The view was also expressed that people increasingly want to take control of their own budgets in relation to health, social care, and housing; and that this approach may provide the most flexibility for the individual. Some respondents stated that the funding arrangements must be based on the ability of the individual to pay regardless of tenure.

5.16 A collaboration approach was also suggested in a limited number of instances, whereby elements of each proposal combined would provide the most effective basis for the future funding of adaptations; bringing together the range of benefits outlined above. The example below involves a mix of the Health and Social Care approach and the individual approach;

“We would see a high extent of overlap between the Health and Social Care Partnerships and individual approaches with an opt-in/opt-out model being adopted (in the short term this being based on the Health and Social Care Partnership as the default but with a longer term move, reflecting the self directed support agenda, of moving towards an individual approach being the default).” (Housing association/housing association representative body)

5.17 The example below involves contributions from all of the potential funders identified.

“An integrated budget with contributions from all parties should be set up and administered by the Local Authority. Allocation should be on a means tested basis to all clients irrespective of tenure and Landlords would have the option of recharging through a service charge for maintenance etc.” (Housing association/housing association representative body)

Views on the Issues and Risks with the Three Approaches (Q8)

5.18 The majority of respondents - nearly 70% - mentioned some risks with one or more of the approaches in addition to those already identified within the consultation document. The main risks noted for each of the approaches are set out below.

Local Authority Approach

5.19 Four core risks were identified relating to the local authority approach. Firstly under this approach, the focus would continue to be placed on the property and not the health and care needs of individuals. Secondly, there would need to be a ring-fencing of funds to ensure that funding is targeted at this activity - this would be counter to the concordat which discourages ring-fenced funding. It is also unlikely that local authorities would create an integrated budget for adaptations as this would effectively result in local authority tenants through the HRA cross-subsidising tenants in the housing association sector, tenants in the private rented sector or home owners.

5.20 The final risk identified was the issue of how and at what level social landlords, particularly housing associations should contribute to the local authority pot. This would need to be resolved although this may be challenging.

Health and Social Care Approach

5.21 A series of risks were also identified relating to the health and social care approach. Firstly, there may be tension between funds required for preventative adaptations and those required for long term care/support. There is also a risk of losing adaptations funding within the broader health and social care agenda if it were to be incorporated in health and social care partnerships, particularly at a time of significant change and restructuring. This may result in priority being given to emerging services.

5.22 As with the local authority funding approach, funds would need to be ring fenced to ensure that funding is targeted at this activity - this would be counter to the concordat discouraging ring-fencing. The integration of health and social care partnerships may also create issues around inclusion of housing services and funding priorities.

5.23 The funding of adaptations is not being resourced sufficiently and there are additional pressures resulting from the need for a focus on prevention. One care and repair organisation also felt that budget savings through adaptations within health and social care are not being invested in prevention.

5.24 Traditionally, adaptations are accepted as key to preventing major expenditure within the health and social care system but when set against crisis intervention and management; it does not have the same profile and is not funded by these organisations to any large degree.

The Individual Approach

5.25 As the individual funding approach proved the least popular, a large number of risks were identified by respondents of all backgrounds. Firstly, encouraging individuals to use their own resources/means testing or qualifying barriers may place too great a burden on individuals (particularly those who are vulnerable). This may discourage some people with significant needs and modest means from seeking assistance, resulting in them not proceeding with necessary adaptations. This could be exacerbated by changes to benefits which are very likely to have an adverse impact on people's ability to contribute towards the cost of adaptations.

5.26 Another funding issue was also noted relating to loans and borrowing. There may be risks associated with the current financial climate where banks are resistant to approve loans, and often those requiring adaptations are least likely to be working or are retired, making it difficult to meet the criteria for borrowing and repaying loans. There would need to be substantial progress made in relation to the development of loans/equity release, otherwise this option may not be viable. There is also a strong cultural resistance by older people to ‘get into debt’ by taking out loans in later life. Many older and disabled home owners may also have difficulty accessing and releasing equity in their home to fund adaptations.

5.27 Individual assessment of funding for an adaptation will not necessarily equal the actual cost of the adaptation when this is carried out by the individual or the landlord and may result in higher quotes than through a traditional care and repair service. There is also risk of personal care budgets not entirely matching the funding required for adaptations, possibly leading to the client having to make a difficult decision between mobility and care, or even having the decision made for them.

5.28 If the funding for adaptations sits with the individual it will be necessary to ensure there are independent, trustworthy, and reliable organisations available to assist the individual plan, budget , and (if required) access resources to fund adaptations. It will be necessary to ensure such organisations cover all areas and are easy to access.

5.29 A number of core generic risks were referenced which relate to all three options including the following which were made by just one or a few respondents each:

• With an ageing population and increasing need for adaptations, demand might outstrip available funding particularly given the current period of public sector funding cuts and the impact of the Welfare Reform Agenda, not covered in the consultation;
• None of the three options provide a combined housing and health agenda - if one or other partnership is not involved in the funding and organisational responsibilities, there may be a lack of communication and loss in knowledge, experience, and contribution from that particular sector;
• If funds are used by individuals on adaptations as part of a self-directed support process, there would not be sufficient funds remaining for wider care requirements;
• The funding approaches suggested concentrate on the installation period only. There are significant financial pressures on landlords to maintain such equipment and as such this needs to be addressed;
• There remains an issue of what role private rented landlords should have in funding adaptations and in the future maintenance of an adaptation;
• Social landlords currently receive stage 3 grant funding through Scottish Government and if this was to be discontinued and a contribution to the cost of adaptations required, rental levels would inevitably be affected and potentially result in tenants waiting longer for essential adaptations to be carried out given budget limitations;
• The risk is that eligibility and criteria for level of need are not clear; and
• Note needs to be taken of the variation in what is constituted equipment and what is adaptation across tenures/providers.

5.30 It was noted that a comprehensive risk matrix should be completed for each option prior to a decision being made on how to fund the delivery of adaptations.

Views on the Arrangements for People with Personal Resources (Q9)

Question 9a

5.31 The majority of respondents (over three quarters) felt that there are issues with the current arrangements for people contributing to the cost of their own adaptations, as set out in the table overleaf.

Question 9a - Do you think we currently have the fairest arrangements for people, who have personal resources, including both income and equity in their current home, to contribute to the cost of their own adaptations?
Respondent Type	Yes	No	Unsure/unclear
Number	%	Number	%	Number	%
Housing associations (n=22)	4	18	15	68	3	14
Local authorities (n=20)	1	5	17	85	2	10
Care and repair organisations (n=9)	1	12	8	88	0	0
Occupational therapy respondents (n=6)	1	17	3	50	2	33
Other groups & representative bodies (n=9)	1	12	8	88	0	0
Individuals (n=3)	0	0	2	67	1	33
Total (n=69)	8	12	53	77	8	12

5.32 The majority of the respondents believed that the system is not currently fair with regards to assessing the ability of people to contribute towards the cost of their own adaptations. One of the main reasons cited was that it only takes into account income; not considerations such as capital in property as provided in the example below;

“The current means testing arrangements are not fair as clients with high amounts of capital, often in property, but who declare low incomes are better off than those with slightly higher incomes but very little capital. There is no penalty for people who move properties after they have grant funded work done and then request further grant funding at another property in the same area.” (Housing Association/Housing Association representative body)

5.33 Few individuals felt the current system works well, is simple to operate, and represents a fair approach to assessing the contribution from home owners’ personal resources. Even those respondents who are of the view that the scale of changes are not necessary still felt that there were some issues to address as set out in the example responses below; including ensuring that children are always funded and that the current system is changed to give local authorities more power and thus more return on capital;

“The current arrangement of 80% plus a sliding scale following financial assessment is fair. Many older people cannot access equity and will thus avoid doing anything to address their needs. This will inevitably result in a burden on public services further down the line… Adaptations for children should be 100% funded… A system which would give local authorities the power to reclaim a percentage of the selling price if an individual sells the property within 5 years of a major adaptation (extension to the property).” (Occupational Therapist)

5.34 This feedback suggests that changes are required to the current system, making it fairer for those individuals who have personal resources to contribute to the cost of their own adaptations.

Question 9b

5.35 Respondents were asked whether or not they would like to see changes and, if so, what these changes would be in order to make it fairer for people with personal resources. As the responses to question 9a revealed, the majority of survey respondents felt that the current system is not arranged in the fairest way for those with personal resources. The following sections detail three suggested changes which could alleviate these problems.

Based on Individual Social and Financial Circumstances

5.36 The most frequent issue seen as significant to tackle was that housing should be awarded primarily based on the needs of individual tenants, particularly with regards to housing adaptations.

5.37 A large number of these respondents suggested that the system in place currently does not truly account for personal resources. These respondents felt that adaptations presently ought to be considered, prioritised, and awarded funding based upon a wider examination of individual social and economic needs; as well as a complete review of housing options available to individuals. Furthermore, a significant proportion referred to the introduction of a resource allocation system. This would allow personal resources to be measured and subsequently taken into consideration when resources are allocated to individuals as set out in the quote below.

“It is clear that the current arrangements (for RSLs) are unfair in that no account of personal resources is taken into account. A resource allocation system linked to an ‘entitlement’ for individuals would appear to allow personal resources to be taken into account when resources are allocated.” (Housing Association/Housing Association representative body)

5.38 The quote below sets out examples of what other information should be taken into account.

“The current mandatory 80% grant should be means-tested, or there should be a ceiling on grant contribution to limit the spending on any one case. In addition, scope to take into account income from compensation payments within trust funds should be explored. The value of or income from second / other homes should be taken into account in the grant calculation.” (Local Authority/Local Authority representative body)

5.39 The majority noted that this should be means-tested as so to best meet individual need; potentially including a limit on grant contribution to help limit the spending on any individual case. Furthermore, respondents believed that the current system is merely based on tenure and does not ensure equity;

“Often individuals are unable to fund 20% of the adaptations even if they are assessed as being able to do so, for example parents of a child with a disability. The current arrangements do not ensure equity of provision as this is based ultimately on tenure. Ultimately it would be beneficial to see a level playing field in respect of funding criteria eligibility across tenures.” (Local Authority/Local Authority Representative body)

Reconsidering the Current Grant Funding Allocation System

5.40 Linked to the issue of means-testing, the second most frequently referenced issue related to the way in which grant funding is currently allocated to households and individuals. A number of areas were identified where the current arrangements could be developed or altered to deliver sustainable solutions, which will help to create a fairer system for individuals with personal resources.

5.41 Firstly, greater clarity and transparency would be beneficial. This relates to the belief that the current system of providing grant assistance to individuals needs to be amended and loans and equity release options could be developed;

“This is an area in need of clarity. Work is required on how grants are disbursed and on the development of loan and equity release options.” (Local authority/local authority representative body)

5.42 There was reference amongst a large proportion of these respondents to the percentage grant which is reasonable. It was felt that reducing the minimum grant from 80% could provide a fairer way to guarantee that each individual is contributing an affordable amount. This could be achieved by altering the minimum grant to a 0-100% or a 50-100% scale. This may help those households facing difficulties in affording to pay for the adaptations, whilst ensuring that those who are able to contribute do so. Such a change is proposed in the example below:

“I think consideration should be given to reducing the grant funding from 80% to what it used to be - 50%, as this seems the fairest way to ensure those who can afford to contribute do so without being heavily penalised for requiring an adaptation.” (Occupational Therapist)

5.43 The following example suggests even more flexibility of 0-100% depending on individual circumstances.

“We regularly see recipients of 80% minimum grants who could easily afford to self fund more or all of their adaptations and believe that the grant regime should be changed up to a 0 - 100% system. Those who feel they cannot self fund their remaining share should have available, an accessible loan and/or equity release support mechanism. This would be invaluable for income poor asset rich people who without a doubt are terrified of dealing with banks and building societies - with good reason, especially given events of the past few years.” (Care and Repair organisation)

5.44 In summary, it was felt by these respondents that a funding system which distinguishes those individuals who are able to fund a larger proportion as opposed to those who have no assets will help to produce fairer results.

Remove Inconsistencies Across Local Authorities

5.45 The third change proposed related to removing the inconsistencies which are currently present across the 32 local authorities in Scotland. This change would be appropriate not only for clients but also partners operating in this area.

5.46 These respondents referenced geographic variations in minimum grant funding; conflicting agendas and priorities; local authorities not uniformly adhering to guidelines set by the national Government; and the need to better communicate the inequality and misunderstood ‘system’. An example of such inconsistencies is provided below:

“Owner occupiers presently contribute to adaptations and although there is a minimum 80% grant this may vary from local authority area. This inconsistency should be removed.” (Care and Repair organisation)

5.47 The example below highlights how the current system has resulted in a postcode lottery for housing adaptations grants:

“Based on Government guidelines each Local Authority has developed its own grant criteria, this has created a postcode lottery for grant assistance…we need to take a fresh look at who can and who should, pay towards their adaptations. Access to low/no interest loans would be a great advantage.” (Care and Repair organisation)

5.48 The example below highlights the potential inequalities across local authority areas:

“The current ‘system’ is unequal and not well understood by homeowners. In practice different local authorities will set their own priorities which leads to geographical inequalities.” (Other group/representative body)

5.49 There was an awareness amongst these respondents of local authorities across Scotland working towards different aims and objectives; creating unfair inconsistencies which need to be removed. It was suggested that these can be removed by enforcing stricter and more transparent guidance; improving leadership and ambition from the top-down; and educating and better communicating with one another to deliver fairer results.

5.50 A number of other issues were raised by respondents, including the need for consistency in terms of personal contributions across tenancies.