Service providers fear for future of Supporting People grant allocations

The total funding councils will get is around £500m larger than the original estimate. But, although service providers welcomed it as the largest pot ever created for housing-related support costs, there were fears that costs could be cut in future.

Last week's announcement covers funding for the first year of the programme from 1 April. The first six months' funding covers schemes that are already running and "pipeline" schemes which will be in operation by March 2006.

Local authorities will review the cost of schemes over three years and there will be a final decision on the size of the grants in September 2003, looking at the real cost of schemes and adding in schemes that may have been missed out of the first estimate.

This could change the funding for the second and third years of the programme, which will be announced in September.

Some providers were worried the review could become a cost-cutting exercise. Andrew van Doorn, national policy and research officer for homelessness agencies group Homeless Link, said grant conditions protecting services would only last for the first six months. He said: "There will have to be significant cuts to the fund in future and there is considerable uncertainty as to whether the ODPM can deliver on the commitments made."

An ODPM spokeswoman said there was "no question of cuts at this stage". She said the review was there to establish the true funding requirements.

A bad reaction to the allocations

also came from The Supporting People Advisory Network, which represents councils and service providers. A spokesman said it was "extremely disappointed" with the low level of funding for pipeline projects. "The low level of funding for such development will create often serious difficulties for local authorities in deciding what they are now able to commit to in terms of new development," he said.

However, Local Government Association programme manager Gwyneth Taylor said she was happy with the grant allocations. She said there were no winners or losers because the funds covered existing schemes and those that were well-developed.

The grant announcement was expected at the end of January, but was delayed by the launch of the Communities Plan on 5 February, amid rumours that wrangling between the Office of the Deputy Prime Minister and the Treasury over the fund's size had contributed to the delay.