Manchester council has become the first local authority to get the top, three-star rating for its Supporting People services.

The council was one of 19 to get an early inspection because the government felt it had high costs.

But it was found to give good value for money. Inspectors said the service was “excellent” and had excellent prospects of improvement because it had boosted the quality of services and had researched local needs and developed services to meet them.

The commission recommended that move-on accommodation and support services for homeless people and those with mental health problems should be developed further, and that the council should ensure that its 24-hour services were cost-effective.

Roy Irwin, the Audit Commission’s chief housing inspector, said: “The council has consistently put outcomes for service users and value for money at the top of its agenda.

“There is a strong emphasis on the provision of information and on improving fair access and responding to diversity.”

Manchester’s director of housing, Steve Rumbelow, said: “We are thankful for having the opportunity to lay to rest misconceptions that the implementation of Supporting People has led to inappropriate cost shunting and cost acceleration.

“We are all very proud.”