The letter, sent two weeks before the new supported housing services funding regime begins on Tuesday, said councils were making changes to the Office of the Deputy Prime Minister’s model contract “to shift all the financial risk onto providers”. It said this could create serious cashflow problems for small or specialist providers.
Changes to the contract, in some cases made on a non-negotiable basis, include:
- giving just three months’ notice of closure or changes to schemes after service reviews, instead of the 12 months in the model contract
- threatening not to pay providers until May, leaving them without Supporting People funds for the first month of the programme
- reserving the right to reduce payments to providers if government funds to the authority are cut.
The head of one small provider of floating support services to disabled people said he had a contract that allowed the council to give him 20 days’ notice of price reductions. If he disagreed with the cut, the council could terminate the deal with a month’s notice. He said: “I would lose £20,000 if they changed the price. I would be devastated if I had to ask staff to go because I didn’t have enough funding.”
One council, whose contract allowed it to give 20 days notice of reductions to the contract price, said the clause was in line with ODPM guidance that allows councils to include clauses to “qualify” contract value when no final figure has been agreed.
Providers said some authorities were issuing harsh contracts because the government expected councils to make savings within the first year. It is hoped that this will end if the government plugs the funding gap for existing services. Gwyneth Taylor, programme manager at the Local Government Association, said: “Requiring authorities to make savings in the first year has, to an extent, forced councils to bring forward proposals to make savings.”
An ODPM spokeswoman said: “We are considering the NHF’s request.”
Source
Housing Today
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