The letter warns that the sector is in financial crisis, with schemes closing across the country, due to a ‘perfect storm' of funding cuts and rising cost pressures in recent years. Many providers are now at ‘breaking point', with the recent increase in National Insurance Contributions wiping out ‘already tight' operating margins. Without urgent action from the government to increase funding, providers responsible for 18% of all supported homes, have said they may have to stop providing services altogether, meaning the loss of 70,000 supported homes across the country.

The National Housing Federation (NHF) says there has been a net loss of 3,000 supported homes in the past three years, adding to a total shortfall of up to 325,000 supported homes, based on unmet need. The shortage has resulted in 109,029 days of delayed discharge from mental health hospitals last year.

The NHF is calling on the government to clearly identify funding for housing-related support allocated to local authorities in England. This will require at least £1.6bn annually and should form part of the government's long-term housing strategy.

Kate Henderson, chief executive of the National Housing Federation, said: ‘Supported housing provides a crucial lifeline for those who need it, giving people the safety, freedom and opportunity to build their lives. Providing this safety net and security not only benefits those who need support, it takes pressure off public services and saves the government money.

‘Today over a 150 organisations join us in urging the government to take action to save our supported homes, services that are also key to enabling the government to deliver on its missions, relieving pressure on the NHS and multiple public services. The upcoming Spending Review is a crucial opportunity to commit the investment needed to secure the future of supported housing.'

Cllr David Fothergill, chair of the LGA's Community and Wellbeing Board, added: ‘Councils need a sustainable, long-term funding arrangement that allows them to invest in schemes meeting local needs and delivering benefits across the board.'