Society: Budgets for the Supporting People programme, which helps provide stability for those at risk, are being eroded by the rising costs of employing and training staff, reports Stephen Naysmith.

A crisis in funding to help people stay in their homes could force services to close and lead to housing woes for thousands of vulnerable people, experts have warned. Robert Aldridge, director of the Scottish Council for Single Homeless, says that unless the Scottish Government's forthcoming spending review addresses some of the sector's looming problems, a raft of services are likely to face cutbacks or closure, forcing more individuals and families into housing crisis.

Huge financial pressures on housing support work come from two main areas - an estimated £120m bill to train staff to new standards and deficits caused by the failure of funding to keep pace with inflation.

Aldridge delivered his warning after new research revealed massive shortfalls in the Supporting People programme, which are leading some agencies to cut provision and are forcing charities to fall back on their own reserves to subsidise their work in this area.

Supporting People was set up by the UK government in 2003 to help vulnerable people live independently and make a success of placements and tenancies. But it has never kept up with the true cost of providing services, according to local authorities and voluntary sector housing providers.

Now, a study carried out on behalf of the Supporting People Enabling Unit (SPEU) has confirmed many of their concerns. The unit, funded by the Scottish Executive and now the Scottish Government since 2004, surveyed 41 service providers working with a range of vulnerable groups.

They included registered social landlords, charities and private agencies working with older people, homeless people, those with mental health problems, physical or learning difficulties and women fleeing domestic violence. The survey revealed that support workers' wage increases as well as other forms of inflation have left many vital services struggling to cope.

The funding provided in 2003 was not enough to cover the costs of most services even by 2004, according to the report, and since then the situation has become much worse. "Most services report a funding gap from the beginning of Supporting People and this gap has increased ninefold between 2004/05 and 2007/08," the report notes.

For those involved in the limited survey, that equates to a combined deficit of £166,000 in 2004, which rocketed to £1.5m this year. Given that there are around 12,000 services provided under Supporting People in Scotland, the figures suggest that overall funding could be falling short of need by hundreds of millions of pounds.

Supporting People funding is broadly static and doesn't increase to take account of inflation. But even those agencies that have received funding increases over the past three years have seen costs rising ahead of any increase. The result is that many housing support services are facing financial strain.

Yvette Burgess, director of SPEU, said: "Providers of housing support are particularly concerned. After three years of constraints on budgets, they are not in a good position. Our research has highlighted the different methods people are trying to deal with this."

The report says these methods include widespread cost-saving and reductions in activity levels (ie work with clients). In some cases, "services have apparently been maintained by using organisational reserves to fund the operating deficit".

Burgess said that if services are forced to close or face significant cuts, Aldridge was right to suggest it could cause problems. She said: "Obviously, there is going to be a knock-on effect, and a lot of the Supporting People money is aimed at preventing crisis.

"Agencies told us they have maintained service levels for the past three years but it is very difficult for them to continue on reducing budgets and standstill funding."

The other problem facing housing support services is the cost of registering around 44,000 staff in Scotland with the Scottish Social Services Council. As part of a programme covering all social care work, the council will begin registering housing support managers in 2010, moving on to include all staff in subsequent years.

Separate analysis by the Scottish Government, the council, the enabling unit and Community Care Providers Scotland has calculated that ensuring everyone in the sector has the necessary skills will cost £120m. As many as 12,000 workers, 6000 supervisors and 1500 managers need more qualifications, the group concluded.

Carole Wilkinson, chief executive of the council, said it was not unrealistic to expect the government to support the sector in addressing the cost of training. Precedents have been set in the sector by programmes such as Early Years, where the registration of staff was supported by additional money to support training, with the result that 80% of early years staff are now qualified.

Wilkinson said she recognised the pressure that registration places on agencies, although she said the estimate of £120m might be on the high side. Nevertheless, the cost of training housing support staff is expected to be high, as the sector starts from a relatively low level of qualification.

Robert Aldridge said problems arose because the Supporting People budget was limited, with no capacity for addressing inflation. He fears "floating" services that help address homelessness by, for example, supporting young people in their first tenancies, may be in line for cuts.

Without any increase in funds, there are bound to be cuts in services, he said. "If the spending review doesn't result in at least an increase that allows people to cope with the qualifications and wage inflation, we are likely to be facing the closure of services and more people in housing crisis."

The problems facing the sector will be discussed at a conference next month in Dunblane. The Scottish Housing and Support Conference includes a session on how much housing support costs and who is paying for it.

This will include the findings of research commissioned by the then Scottish Executive to explain why the Supporting People programme costs twice as much in Scotland as it does in England. Norrie Murray, Scottish Government finance officer, will reveal the reasons. These are thought to include the fact that more Supporting People money is spent on older people in England, where services for older people are much cheaper than in Scotland. This country also spends more money on supporting people with learning disabilities and significant physical disabilities.

While many are pinning their hopes on the Scottish Government and the forthcoming comprehensive spending review, some argue that even addressing the declining value of Supporting People funding may not be enough.

David Liddell, director of the Scottish Drugs Forum, said that current policy would result in an even greater need for quality housing support. "The figures highlight the huge extent of services required to support people with all sorts of social, physical and psychological problems," he said. "It is often the case that people with drug problems, for instance, have other issues such as mental health or physical disability issues.

"The focus of drugs strategy in Scotland is increasingly about developing and supplying wraparound' services, such as housing, to make drugs treatment more effective.

"This will place new, further demands on existing resources for the programme, and it remains to be seen if that challenge can be met. The truth is that the scale of need across many types of disadvantaged groups is huge, and we should be investing appropriately to meet that need, whatever form it takes."

A spokesman for the Convention of Scottish Local Authorities said: "The evidence from local authorities suggests a continuing demand for support as the patterns of care change. Our ageing population and other care policy drivers such as enabling disabled people to receive personalised care are all putting pressure on the demand for support.

"We are currently in discussion with the Scottish Government regarding the spending review. The convention is working hard to ensure that local government receives the best overall financial package possible for all of the services local government provides."

A Scottish Government spokeswoman said ministers recognised the pressures on the Supporting People budget. She added: "Ministers will take this research into account, as well as research on funding gaps identified by the enabling unit, when setting the Supporting People budget in the spending review."