Reflections on DLUHC's Home for Ukraine Scheme funding update

By Dmitri Macmillen and Adis Sehic - 16 December 2022

The government has announced a new package of funding to support the implementation of the Homes for Ukraine Scheme. Although this move is welcomed, there is more work to be done to fine tune the government's response to the crisis in Ukraine.

On Wednesday, the Department for Levelling Up, Housing and Communities (DLUHC) announced a host of additional financial support to assist in the implementation of the Homes for Ukraine Scheme (HFU). This included topping up 'thank you' payments to hosts to £500 after their Ukrainian guests reach their first year of sponsorship, and extending the duration of thank you payments from 12 months to two years. It also included £150m and £500m pots of funding to assist local authorities in acquiring new housing stock and getting Ukrainians into their own homes. New hosts have once again been encouraged to come forward to help deliver the re-matching aspect of the HFU, as sponsorship arrangements have been breaking down for a number of months already.

Although overdue, we broadly welcome the government's announcement for additional funding to the scheme. However, as we explore in this blog post, further changes to the government's approach are required to better assist the population of Ukrainian arrivals in the UK as a whole.

Recalibrate payments

Given the rising cost of living and pressures driven by increasing inflation, we have been calling for the increase in thank you payments for several months now, as featured in our first Ukraine report, Six Months On. That report, and its recommendations, was informed by data collected from a survey of 191 Ukrainians in the UK, who fed back to us on their experiences of housing, employment, benefits and general welfare so far.

The increase in payments to sponsors is a welcome first step, but many sponsors are struggling now, and have been for many months. Although it is understandable that hosts who have been sponsoring since the outset of the HFU need to be directly supported, it makes little sense for hosts to have to wait 12 months before receiving additional financial support. There is a risk that this will create a two-tier system of funding, and potential hosts will be disincentivised from signing up to the scheme. To tackle this, we recommend increasing payments for sponsors who have already hosted for six months rather than 12, as six months represents the initial period of time that hosts were asked to accommodate arrivals for.

There is also a separate point to be made about how funding is utilised outside of the tight parameters of the HFU. For example, we are aware that many previous sponsorship arrangements have been converted into lodging agreements between hosts and Ukrainian arrivals. This is outside of what is envisaged by the HFU, and so these hosts are no longer eligible for thank you payments. In our view, this is a missed opportunity - DLUHC should consider whether there is any scope to 'passport' payments under the HFU to these new arrangements, considering they consolidate existing circumstances of accommodation for Ukrainians and prevent additional pressure being exerted on local authority housing and homelessness teams. 

There are also two important points DLUHC has overlooked in the new funding package. First, no provision is made for the varying size of families that sponsors are hosting, and some hosts are going to be worse off than others because of the demands that larger families are likely to bring. Second - and most importantly - there is still no funding arrangement to support arrivals and families as part of the Ukraine Family Scheme. This is crucial as the needs of arrivals under the Family Scheme are similar, if not more acute, than those arriving under the HFU. Indeed, our report found that arrivals under the Family Scheme were more than twice as likely as arrivals under the HFU to be at risk of eviction, indicating that they face even greater challenges this winter. Given that local tariffs for Ukrainians arriving after 1 January 2023 will be reduced by £4,600 per head, DLUHC needs to consider how it can best address the challenges faced by the most vulnerable Ukrainians.

Consider how different authorities support Ukrainians into independent accommodation

As many media outlets have reported since the summer, Ukrainians are finding it difficult to access independent accommodation solutions outside of the remit of the Ukraine schemes. The new pot of funding for local authorities in this regard is welcomed, but how that money is spent will be a deciding factor in its overall utility for Ukrainians.

In terms of accommodation, we know that there are many regional variations in the value of rents. We are aware that some local authorities have been using existing funding to help support Ukrainians into the private sector in the areas in which they are located. On the other hand, some authorities have been helping to support Ukrainians into properties that are located in more affordable areas. Similarly, there is a question about whether this new money would be better spent by channelling the funding to councils who are hosting the greatest number of Ukrainians altogether, or to those councils that would benefit most from underlying investment.

It remains to be seen whether DLUHC will provide authorities with more concerted, strategic direction about how funds are used to support Ukrainian populations that have arrived in their local areas, or whether authorities will once again be left to tailor their own solutions, even if this means discrepancies in council support across neighbouring localities. 

Forward-thinking housing supply

As part of the new funding, DLUHC has seemingly acknowledged the housing pressures faced by local authorities and given them greater financial power to access a greater variety of properties. At least in part, this mirrors an initiative introduced in Scotland in September, that looks to fund authorities to reinvent and refurbish non-residential and dilapidated properties for use as accommodation.

The funding is said to contribute to 4,000 homes by 2024, and will provide a "new and permanent supply of accommodation for local communities". We are cautiously optimistic about this announcement. According to Home Office statistics from November, there are over 9,000 Afghans still being housed in hotels or serviced accommodation across the UK. Similarly, in July, the Office for National Statistics found that 25% of hosts under the HFU were only considering hosting Ukrainians for six months or less. Recent asylum seekers are also struggling to be housed in suitable temporary accommodation. This context matters, and if these trends continue, it is likely to increase the demand for properties by many more thousands.

Again, there is more to be said about how this funding will be used in practice. Our last Ukraine report identified the recent volatility of prices in the private rental market, and how this was affecting Ukrainians in limiting their access to the pool of available housing. As other organisations have noted, additional social housing, which is connected to incomes at a local level, should form part of this conversation, and how we can protect large numbers of these homes from being sold into private ownership, as councils try to plug long-term funding gaps.

Clarify expectations to make re-matching efficient

The government's additional call for new sponsors is, in theory, positive, but we are again cautious about the current approach - there cannot be an outright delegation of the momentous task of refugee integration to civil society as a whole. It is important to reflect on the fact that the number of Expressions of Interest (individuals expressing an interest in sponsoring under the HFU) has decreased since the inception of the HFU, as potential sponsors are understandably worried about their own ability to meet the rising cost of living. For re-matching to work properly and as initially envisaged, sponsors need to be far better informed about what the government’s long-term hosting expectations are and how, precisely, they can be expected to support Ukrainains to establish independent livelihoods in the UK.

We hope that DLUHC will continue their ongoing work in fine tuning the UK's response to the needs of Ukrainian arrivals, including by listening to local authorities and civil society organisations as stakeholders who can give a voice to those directly impacted by these policy decisions. We anticipate that this will be an ongoing process, as the conflict develops and as more Ukrainians likely enter the UK in 2023.

If you or someone you know is struggling with understanding and accessing rights under the Ukraine Schemes, don't hesitate to get in touch. Our Service Provision team is here to help. Or, to support our charity, please consider making a donation: 

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