Effects of Brexit on social housing and social care organisations

Posted by William Downing on
As Yogi Berra said "It's tough to make predictions, especially about the future" but we all need to plan.  The Brexit vote has created great uncertainty in the short to medium term for the UK.  Whilst this uncertainty will have more immediate impact for internationally focussed businesses, the domestic social housing sector will also be facing uncertainty.

The most significant risk will be in relation to funding for social housing and care providers.  Registered Providers and charities have already suffered funding issues from recent austerity budgets.  Furthermore, the banking sector has been less keen to lend on favourable terms.  The HCA has been keen to ensure that RPs are focussed on financial viability in light of the cuts.  If the economists' predictions are to be believed, Government finances will take a further turn for the worse in the coming years, which could lead to further cuts in funding.  Banks may also come under stress meaning the availability of funding is restricted.  Social housing and care providers may need to look again at the options for dealing with further cuts in funding and less mainstream bank lending.  Our social housing and care clients have been prudent in stress testing their finances in detail, but that scrutiny will need to continue. 

Options to hedge against the risks have already been considered by many organisations.  But again these options may now be a need to be revisited.  The options we have been involved in advising on include things such as:

  • to cut or share costs
  • diversify and generate income from commercial activities
  • borrow from favourable sources
  • consolidate or end services that are no longer supportable
  • merge.

Another issue that will need to be considered is the availability of staff to cover specialist work, such as in homes for older people or services to those with learning difficulties.  A significant minority of roles undertaken in social housing and care are undertaken by foreign nationals.  One of the core aspects of the referendum debate was the benefit or curse (depending on which side of the debate you sat) of the free movement of people across Europe.  It is now very likely that the right for EU citizens and those from outside the EU to work in the UK will be severely restricted.  This will lead to recruitment shortages and a need to follow processes for obtaining visas for overseas staff (and there will presumably be a cost to that process too).

I also wonder whether there will be an increased need for many services provided by social housing and care organisations.  I am the Chairman of Oxford Homeless Pathways and we expect there to be increased demand for our homelessness services arising from the likely economic turmoil (particularly due to the expected increase in unemployment and a rise in mortgage costs).  Other excellent services provided by social housing and care organisations, such as employability and debt advice and counselling services may see increased usage.

In my view, the social housing and care sector has always shown itself to be resilient and flexible to change and will be better placed to deal with what comes its way than many sectors.  We are here to help in making and implementing changes for you.

Click here to download our free Brexit guide.

About the Author

William is head of our Employment law team based in the Thames Valley. He provides immediate and commercially sensitive advice concerning all employment law issues.

William Downing
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