Supporting People
JIMI MACKAY/CIA
As Supporting People
funding shrinks,
Andy Ricketts asks
whether it’s better to
be a small, medium
or large provider
‘If it wasn’t for you, I wouldn’t be here.’
For many of those who work on the
frontline of Supporting People services, it’s
a sentiment they will have heard time and
again from the vulnerable people they’ve
helped. Often it’s no exaggeration.
But the gradual squeeze on central
government funding to prop up what can
be life-changing services has meant tough
decisions for service providers. Many have
found themselves scratching their heads
and wondering where the next savings can
come from as it becomes harder to balance
the books. Tales of providers selling off
assets, family silver-like, to stay in the game
are common.
Now there’s a debate – with providers
falling into three broad size categories, is it
the small, the medium or the large which
are bearing the brunt of the cuts?
First impressions suggest the smaller
providers are suffering more than the
sector’s big boys.
For example, Colchester Quaker
Housing Association – with fewer than
300 supported housing units – hit the
headlines last year when a money-saving
procurement drive by Essex Council
deprived it of the bulk of its floating support
contracts. The association was eventually
swallowed up by Family Mosaic.
Councils across the country have since
followed Essex’s lead, cutting providers
and advertising tenders. Supporting
People consultant Nigel Rogers says that
initially all sizes of organisation were
worried about the cuts and procurement
drives, but the smaller providers are
proving most at risk.
‘We were going through this phase
where all the small providers thought that
the big providers were going to win all the
contracts and the big providers were scared
because the local authorities were saying
they wanted local providers,’ he says.
‘But now it is much harder for the smaller
providers to hang on to their side of the
market. You do not tender for 25 units of
floating support – you tender for services
across the city or county.’
26 Inside Housing 23 March 2007
Supersize me
Not only does that mean disproportionate
bureaucratic costs for smaller organisations,
but it’s tougher for them to repackage
services if they are not meeting local need,
he adds.
But Emma Daniel, chief executive of
SITRA, says the cuts have bitten across
the board. ‘In terms of how [the cuts] are
impacting on people’s businesses I do not
think there is a big difference between big
and small providers,’ she argues. ‘Salary
costs are the main costs in providing
support services and in that respect the
pressures are not vastly different across
different sizes of provider.’
That said, she also claims that larger
providers are gaining some ground over
their smaller counterparts. ‘One advantage
that the large providers have, if they have
one, is that they have the infrastructure
to respond quicker to the procurement
agenda. They are also able to take on risk in
the way that smaller ones are not able to.’
According to Sue Ramsden, policy leader
at the National Housing Federation, as
commissioning decisions are taken locally,
the way in which providers are affected by
cuts varies. Overall, smaller organisations
find themselves in the most perilous
circumstances, she says.
‘Some [councils] have gone for large
contracts to provide services which are very
difficult for small organisations to bid for,
and for them to deliver on.’
She adds, ‘You can say that they [small
providers] are vulnerable but you cannot say
across the board that they have suffered.’
Size notwithstanding, all providers
have undoubtedly suffered cuts. But
in the current environment, it seems
as if most providers acknowledge the
unique struggles faced by the smaller
organisations, particularly in competing
with the big providers for large contracts.
And there is still a long way to go before
the future landscape of the supported
housing sector is settled. The provision of
SP services may be at times a dirty business,
but few would decry their purpose.
➔ Continued overleaf
Not all their own way: large providers
The large providers look set to dominate
the market place, or so most smaller of
those than them murmur. But the bigger
players themselves insist they’re not
having it all their own way.
Andrew Painton, chief executive of
Stonham, the largest individual recipient
of Supporting People cash, says his
organisation axed more than 200 staff
in a massive SP-prompted cost-reduction
drive.
The organisation has effectively
suffered an almost 12 per cent cut in real
terms funding over three years, he says.
‘We have absorbed that in making
efficiency savings but you just cannot
keep doing that,’ he says. ‘What is
happening is pretty much applicable
to all sizes of provider – it is hitting
everyone.’
But further chunks of lost funding
would lead to Stonham having to cut
services – something it has managed to
avoid so far. ‘We are pared right back
now, so what we are talking about now is
reductions in the level of services,’ warns
Mr Painton.
Stonham has beaten competition
from local consortia to land a couple of
large Supporting People contracts, which
has seen its popularity dive with some of
the losing providers.
Mr Painton acknowledges their
sentiment, but says: ‘We want to be a
successful organisation, we think we are
good at what we do and we want to go
for new business.’
Barbara Laing, housing services
managing director at Anchor Trust, which
supports around 24,000 older people,
says she’s worried about the trend for
schemes previously run by a single
provider being split between several. ‘It
means we face having scheme managers
having to have their hours reduced,’ she
explains.
She adds that larger providers
are more likely than more modest
organisations to contract out certain
functions – such as call centre and alarm
services – which run across their services.
This can be expensive, besides making
it trickier to explain to service users who
is providing the various parts of their care
packages.
Cut-ometer 3/5
✗✗✗
It is much harder for smaller providers to hang on to their side of the market. You do not
tender for 25 units of floating support – you tender for services across the city or county
Poised to dominate? medium providers
Dominic Games, Supporting People coordinator at Paradigm Housing Group,
is fairly upbeat about its position. ‘The
situation for us at the moment is not that
bad,’ he says.
The provider has not yet lost any
contracts or had to scale back any of its
programmes across the 1,000 or so units
of support it provides. He argues that
uncertainty about the Supporting People
regime is providers’ biggest problem.
‘It has been permanently shifting
sands. And for us, whose many services
are quite low level support, it has created
a disproportionate amount of support
cost to keep up with those shifting sands.’
Some suggest that medium-sized
providers are poised to take over the
market – they have the infrastructure
to bid for contracts and may not have to
slash services to move forward.
Mr Games doesn’t think this applies
to Paradigm, but agrees there are
opportunities for medium-sized
providers. Yet he warns against
organisations stretching themselves too
much in the current changing climate.
‘One big change and you could be in
trouble,’ he says.
The providers suffering the most, he
thinks, are doing so regardless of size.
Their pain, he says, comes as a result of
having relied too heavily on Supporting
People funding for services which later
turned out to be ineligible for the cash.
Mr Games says Paradigm had a lucky
escape. ‘If we had not prepared as well
for Supporting People we could have
been hit. We decided not to go down the
road of overloading services, as we were
encouraged to do, but we were honest
and that has served us well.’
Cut-ometer 2/5
✗✗
23 March 2007 Inside Housing 27
Supporting People
Unable to compete: small providers
John O’Sullivan, chief executive of St
Johns Housing Trust, which provides
support for around 200 individuals,
reveals that the trust has been forced
to prop up its support programmes by
dipping into its cash reserves to the tune
of around £80,000. ‘We are still setting
deficit budgets which is not the best way
of going about our business,’ he admits.
‘It has been incredibly difficult with
the lack of inflationary uplift over the last
three years.’
The cuts are affecting jobs and services
and raising safety issues. ‘We do not have
enough cover for double cover at some of
our hostels which is a bit risky,’ concedes
Mr O’Sullivan.
‘We have not lost any services but
with local authorities putting everything
up for grabs there will be losers. Local
authorities are in an incredible rush to go
out to tender in some of these areas and
I think it will result in the demise of more
organisations.
‘Some of the really small providers
have voted with their feet already and
some have just said we will walk away
from it,’ he adds. ‘That will be happening
quite a lot – one or two post schemes
are just disappearing and inevitably the
service users will miss out.’
Halford Hewitt, director of Ipswich
Housing Action Group, says small
providers find it harder than larger
organisations to cut costs.
‘You cannot keep making savings of
3 or 4 per cent each year if you have got,
say, four staff on one contract,’ he says.
‘You can of course save 25 per cent by
getting rid of a staff member but you
cannot get rid of 10 per cent of a staff
member.’
And he is pessimistic about the future
for smaller providers. ‘Five years down
the line there will have been a huge
transformation in the way services
are provided. There will only be large
organisations, I think.’
That would be a shame, he argues.
‘There is also an issue from a county
point of view. If you award a contract to a
provider like Stonham, how much of
that money goes out of the county to
account for central costs?
‘We live in Ipswich, we spend our
money in Ipswich, and the money gets
recycled locally. People talk about best
value [achieved by larger providers] but
you have to consider how much that is
costing the local community.’
Cut-ometer 4/5
✗✗✗✗
JIMI MACKAY/CIA
You cannot keep
making savings of 3 or 4
per cent each year if you
have got, say, four staff
on one contract. You
can of course save 25
per cent by getting rid of
a staff member but you
cannot get rid of 10 per
cent of a staff member
28 Inside Housing 23 March 2007