The Government has today confirmed that the £1.66bn Supporting People Programme Grant will not be ringfenced.

The Supporting People programme helps around a million vulnerable people each year to live independently in their homes or safely within supported accommodation - including older people, victims of domestic violence, teenage parents and those with mental health problems.

Since its launch in 2003 Supporting People has been paid as a ringfenced fund for councils, to be spent according to specific rules.

However next year, for the first time, Supporting People will be allocated to councils as a non-ringfenced named grant, paid separately to, but with the same financial flexibility as, Area Based Grants.

The Government say the removal of the ring fence provides councils with the opportunity to come up with new and innovative ways to support vulnerable people in a range of different situations.

To ensure a smooth transition to the new system, in 2009/10 Supporting People funding will continue to be paid to councils as a specific named grant, but with the same financial flexibility as the Area Based Grant.

At over £1billion, Supporting People is the largest single grant in the financial settlement for local government. The changes are part of a wider commitment that by 2010-11, £5billion funding will have been moved into non-ringfenced Area Based Grants - delivered in one single payment to councils each month.

Communities Minister Baroness Andrews said:

'I am delighted to be able to confirm that councils in England will receive  £1.6billion Supporting People funding next year, to help the most vulnerable  people in their communities to live independently and break the cycle of  deprivation.

'But, based on successful pathfinder pilots, we have now offered councils new  freedom of funding. This along with the first-ever three-year financial  settlement, gives councils the flexibility and security they need to manage their  budgets effectively - and the ability to find new innovative ways of working to  deliver much-valued local services efficiently and effectively.

'Councils will now have greater flexibility to build on this excellent work and  improve the support on offer to those people who need it most in their  communities, and how they work with key local partners including the  voluntary sector.'

A package of measures is being developed to support the sector during this period of change. This includes a new financial modelling tool, to be published next year, which will provide evidence at a local level on the financial benefits of investment in housing support.

Guidance has been published to support councils as they assess the need for housing-related support in their local area.

And discussions will continue with commissioners and practitioners of Supporting People services to further develop the transition package as they deliver housing related support with increased flexibility.

Supporting People will be included in Area Based Grant from 2010/11.

Councils' performance in delivering housing support will also be measured through the new Comprehensive Area Assessments, and through two key performance indicators in the slimmed-down national performance framework - ensuring that the changes in funding lead to improved services for vulnerable groups.

This year the Government has been working with 15 local authorities, as well as providers, service users and stakeholders within those authorities, to examine how the delivery of housing support could be affected by financial flexibility.

Councils in the study have already found new and effective ways to help vulnerable people with Supporting People funding. For example, Tameside Metropolitan Borough Council has established a new tenancy support service for young parents. And Bournemouth Borough Council has used its non-ringfenced funding to pay for a prison transport service to help ex-offenders make their appointments and turn up at arranged accommodation.