Care providers fear new sheltered housing tenants will see a hike in their service charges under the Supporting People proposals.
For council and post-transfer association tenants, service charges could double because council and transfer providers will no longer be allowed to cross-subsidise supported housing charges with rental income from other areas of the business.

This practice has been standard procedure but will be outlawed as the government feels it would compromise Supporting People's principle of separating rent from support service running costs.

Care providers say older people will be reluctant to move to sheltered housing if the rent increases and may stay in their own homes without help until they require residential care. That would scupper health secretary Alan Milburn's plans to boost sheltered housing to decrease dependency on residential care.

It’s not right that new sheltered housing tenants will pay more for the same service

Nick Abbey, Hereward HA

Hereward Housing Association, which has a mix of general needs and transferred sheltered housing stock, fears its support costs will double from £8 a week to £16.

Chief executive Nick Abbey said he did not think it right that sheltered housing tenants would "get the same service but new tenants would pay a lot more for it. People will stay outside sheltered housing as long as they can because it will be cheaper." He said rent restructuring could mean new sheltered housing tenants paid 10% more rent than current residents, whose rent will increase gradually over three years.