Under the plans, 10% of funds would be docked from providers of short-term, non-community care projects, even if they had a small number of empty properties to account for.
This would affect providers' interim funding from January 2003 until their permanent contracts begin in April.
A spokeswoman for the Office of the Deputy Prime Minister said 10% was the average level of voids for the sector according to Housing Corporation data. She said it was "unrealistic" to expect facilities to be fully occupied all the time, and funding the service as if there were no voids would "result in an overestimation of the Supporting People pot size".
But Chris Hampson, head of policy, strategy and service development at Look Ahead Housing and Care, said: "Our voids just aren't that high. Some providers can absorb lost income when others cannot.
"We could increase our charges to users through housing benefit but we have already done this once. Other providers have done it several times."
Local authorities may be able to help out small projects but service providers fear this may mean taking money from other projects.
Diane Henderson, head of care, support and diversity at the National Housing Federation, said: "We would have liked them to have a sliding scale to take account of actual voids."
But she pointed out: "This is only in the interim contracts and people will negotiate their own rate for the permanent contracts."
Maria Donoghue, group chief executive of service provider coalition the Novas-Ouvertures Group, said: "The proposal will especially adversely affect high-demand, high-performance services where reduced funding will have a negative impact on service provision.
"It is perverse that the proposed system includes a disincentive to deliver high performance and achieve full capacity. Supporting People grants should be linked to actual performance."
Source
Housing Today
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