2nd opinion: Naked in public

ou know the story of the emperor's new clothes: an emperor parades naked in public, having been told that he is wearing a sumptuous new outfit, and only a small boy has the courage to tell him the truth.

The reason why the adults surrounding the emperor don't tell him he is naked is that they all have something to lose: be it the emperor's favour, their reputation for wisdom or their position at court. Even the emperor himself has something to lose by admitting he has been duped by his tailor.

In the kingdom of Supporting People, the new financial regime by which local authorities pay for support services for vulnerable people, we all have something to lose. It is due to start on 1 April, but providers of supported and sheltered housing cannot say they are not ready for it because they are anxiously developing new working relationships with their local authorities, who will monitor and inspect their services. Those local authorities will accredit them, or not, to provide services to vulnerable people following a barrage of inspection tools set up and approved by the Office of the Deputy Prime Minister: scheme reviews, accreditation schemes, performance indicators, validation visits.

Local authorities cannot say that they are not ready for Supporting People because the delicate balance between central and local government swings ever more heavily towards central control. To admit to not being ready to pay out the first tranches of Supporting People Subsidy on April Fool's Day amounts to an admission of poor administration and failure to meet government deadlines. This type of failure could mean reductions in future grant.

Last, but not least, the government itself cannot admit to not being ready. There has been an exceptionally long lead-in period to this regime and wide consultation. The government has set targets, milestones and instructions and has by turns bullied, encouraged and funded all parties to try to get this thing to work.

But the fact is, the sector is not ready.

Contracts between local authorities and providers were originally supposed to be signed by the end of January. Now that has been put back to the end of February. Out of the 170 or so contracts that we anticipate having to sign at English Churches Housing Group, we have received two.

Most local authorities have already abandoned the hope of meeting the deadline. They are concentrating on the effort to agree the "schedules" which are appended to the contracts, which set out what services are to be provided at what price. But many of these have not been calculated, let alone agreed.

In the kingdom of Supporting People, we all have something to lose if we admit we are not ready for the new regime

The figures that have to be entered into these schedules come from the legacy funding – that is, pots of money scattered all over the place, which currently pay for these services. One local authority officer told me that the one thing he could say with confidence about the figures he has received from the Housing Corporation for supporting housing management grant, from the housing benefit for the transitional housing benefit figures and others, is that they were all wrong.

But on 31 March, the legacy funding will disappear as the new Supporting People grants are due to be paid. ECHG is running 73 supported housing schemes (many of which comprise a range of housing provision) and 98 sheltered schemes for older people, all of which depend upon our estimated income of £25m.

So, how do we feel about the prospect of continuing to run these services without signed contracts in place and when, even at this late stage, we have not got the certainty that the value of the contracts has been agreed? Well, let's say that Supporting People is high on our list of priority risks.

As with all risks, providers must consider how best to manage them. First, keep knocking on the door of the local authorities to get agreement for your figures, and even better, a contract to sign.

Second, providers must be poised and ready to collect the income. Staff procedures and IT systems to invoice, collect and monitor the income need to be in place before the first invoices go out.

Third, you may need to talk to your funders if there is likely to be a cashflow problem when Supporting People stutters at the starting post.

Finally, my advice is to send out invoices for your services by 28 February anyway – that's only six weeks away, after all. The invoice should be for the agreed sum, but if a sum has not yet been agreed, it should be for the sum submitted as calculated by the provider as the cost of Supporting People for that scheme.