A supporting chance

In what is believed to be the first of its kind, the decision by the London Rent Assessment Panel last week that Supporting People charges do not fall within its jurisdiction caused sighs of relief in the Office of the Deputy Prime Minister and at RSLs across the country. This is because the Supporting People budget, which comes on line on 1 April next year, will be based on support charges imposed this year. If panels were able to review charges, the budget may not have been sufficient to meet need.

Supporting the theory
The central purpose of Supporting People is to improve the quality of support to vulnerable people by focusing provision on local need and introducing a robust monitoring and inspection programme.

Existing funding streams that pay for support such as transitional housing benefit will be replaced by a single Supporting People grant administered by local authorities in conjunction with housing, health, social service and partner agencies.

Until the funding arrangements are established, all publicly funded care providers have been required to split charges so that core rent, service and support charges are separately identified. However, this separation is preventing care providers from subsidising support through other revenue streams, which in turn has led to significantly increased charges for service users who do not qualify for means-tested benefits. In last week's landmark case, the total weekly charges on one scheme had increased from £69 a week to £165 a week as a direct result of the new support element.

The scheme in question provides accommodation and support to five tenants. Three receive housing benefit and therefore qualify for transitional housing benefit in respect of their support charges, but two do not. The two non-qualifying tenants referred the case to the Rent Assessment panel under section 13 of the Housing Act 1988.

RSLs must ensure they can enforce payment of support charges

The role of the panel is to determine a market rent for the property. The problem for the affected RSL was that the appropriate market rent was £100 a week.

Tricky definitions
Unfortunately for the panel, there was little guidance on whether support charges should be regarded as rent within the context of their jurisdiction. Under the 1988 Act, the panel only has jurisdiction to determine "market rent". This is defined as core rent (the charge for accommodation alone) plus service charges. Service charges are defined as "… an amount payable by a tenant to the landlord as part of or in addition to the rent which is payable for services, repairs, maintenance, or insurance, or the landlord's costs of management". Since support charges are not core rent, the panel had to decide whether they are service charges.

The panel found that support charges could not be service charges because they were for the benefit of the tenant rather than the property. This meant the panel could not review the support charges.

Make sure you get paid
The story does not end there however: RSLs must ensure they can enforce payment of support charges. They will not be able to do so if tenants are not obliged to pay. This is because county court possession actions focus on contractual rights and obligations under the original tenancy agreement and any variations made to it.