Scaling Youth Foyers for NSW

There is renewed nation-wide interest in the Youth Foyer model as a strategic response for some young people at risk of homelessness. The value of the model lies its integration of housing with strategies for the effective transition from vulnerability to further education and employment.

It is timely for local, State and Commonwealth government to consider scaling up Foyers in NSW as:

• Foyer Central has recently opened in Sydney (Uniting, St George Community Housing, Social Ventures Australia), with NSW and Commonwealth support
• Victorian research has improved on the quality of previous evaluations and demonstrated positive outcomes and a cost-benefit for government (Coddou, et.al., 2019) – consistent with less rigorous evaluations of other foyers
• AHURI has published its peer-reviewed Redesign of a homelessness service system for young people (MacKenzie, et.al., 2020) which positions Foyers as an important part of wider youth-specific social housing options.

In this Policy Brief we explore key issues of:

• Where do Foyer’s fit in the policy landscape?
• What reasons are there for governments to invest in Foyers?  
• What might be an appropriate scale for NSW?

Why is this issue important?

Between 40 and 50 percent of young people exiting homelessness services move into a situation of further homelessness, indicating a need for youth-specific social housing options which recognise their developmental needs, and their low and insecure incomes (MacKenzie, et.al., 2020).

Sixty to seventy percent of Australians who ever seek help from Specialist Homelessness Services (SHS) have left school before completing Year 12 and never recovered their education (MacKenzie, Flatau et al. 2016). If people leave school without Year 12 or equivalent and do not recover their education by the age of 24 years they largely remain disadvantaged for the rest of their lives (Lamb and Huo, 2017).

Improving life-course outcomes

Improving the outcomes experienced by vulnerable young people is a critical challenge for communities and governments. Much is invested in the health, education and wellbeing of children, but the return on that investment can be lost during the transition to adulthood, leaving young people with diminished life-course outcomes.

The best evidence available on the costs of different cohorts of people to the NSW Government (Their Futures Matter – Data Snapshot, 2019) indicates that at June 2017 there were just over 30000 vulnerable young people transitioning to adulthood in NSW. Based on linked data and an actuarial assessment, these young people were expected to cost just the NSW Government a total of $3.9B more than their average peers.

The NSW Government’s Better Lives for Vulnerable Teens Review (DCJ, 2014) found that:

• Young people’s experiences of fragmented services and serial crisis interventions can do further damage to their wellbeing and life-course outcomes
• Education and employment are foundational to young people’s transition to independence and long-term outcomes (see also MacKenzie, et.al., 2020)
• A focus on achieving education and employment outcomes can be used to drive holistic responses to the factors contributing to a young person’s vulnerability 

Foyers are a critical option for policy makers to consider because they redress the Australian siloing of housing/homelessness services from education/employment services, and they shape delivery to achieve education and employment outcomes. 

What does the research tell us?

Since the 1990s Foyers emerged in the UK, United States, Australia, France and elsewhere as a response to youth homelessness. Meta-reviews of the evidence conducted in Australia (Levin et.al. 2015) and Norway (Menseses-Echavez & Berg, 2018) found that while many international studies since 1995 have reported positive outcomes, none had a truly rigorous research design. This deficiency has subsequently been addressed through an outcome and economic evaluation of the three Education First Youth (EFY) Foyers in Victoria.

The EFY evaluation validates what evaluations of other Foyers have reported over many years, and our use of that report is not to recommend any one model.

What makes the difference?  

Programs responding to youth homeless have remained largely unchanged in Australia for the past 30 years, despite homelessness’ complex causes (Levin et al., 2015). Rather than integrate housing with education and employment supports, programs have typically been funded in ways which over-stretch and silo services, resulting in crisis focussed delivery and limited capacity to secure long-term outcomes.

Foyers change this by providing a package of accommodation and support to young people aged 16 to 24 years who are homeless or at risk of homelessness, typically including (Menseses-Echavez & Berg, 2018):

• Secure, stable accommodation, with an average stay of under two years
• An up-front agreement for residents to participate in education, training or employment as a condition of their accommodation
• Tailored youth development and support services, including training, mentoring and living skills
• Assistance with securing employment and transitioning to independent living
• Sports, arts and social activities

Part of what Foyers provide young people is a supportive peer community. In some evaluations some young people have found large Foyers too big (eg. greater than 90 units), or the peer environment too complex (KPMG, 2018). Accumulated experience in the UK and Australia seems to indicate that about 40 units is a good size for maintaining a positive peer community, and for maximising financial sustainability (Steen and MacKenzie, 2016).

However, each foyer needs to be designed around the young people it targets and with consideration of the surrounding community and service landscape. Some foyers provide accommodation in one site, while others have accommodation scattered around a hub. 

Who are Foyers appropriate for, and who not?

Foyers work for people who are ready to engage with training, education and employment, despite a history of vulnerability. This “readiness” approach is critical for being open to people who may otherwise be considered “too hard” or too great a risk. However, it is important that other services are therefore in place to assist people first address key risk factors in order to be ready later for Foyer life or other forms of social housing. 

The current generation of three Tasmanian EFY Foyers exclude people with

• Unmanaged mental health issues or a recent suicide attempt
• Unmanaged drug and alcohol issues
• Current charges likely to lead to incarceration
• Recent violent behaviour or serious conviction

Foyers need to be selective in their admission of people, but that screening is focussed on where they are now, not what their history is. The following table outlines the experiences of the 331 young people who entered the three EFY Foyers during the evaluation, which were largely comparable with the resident experiences reported in other Foyers (Menseses-Echavez & Berg, 2018).

Young people in the EFY Evaluation
Experienced OOHC at any time	33%
Experienced detention, remand, prison at any time	4%
Experienced supported housing at any time	55% Crisis accom. 29% Transitional or other
Housing at referral	30% Friends, relatives 28% Crisis accom. 20% Transitional 11% Parent’s home   6% Own place   5% Sleeping rough
Lived in 3 or more places in last 12 months – at entry	57%
Mental health, at entry, using Kessler-6 scale	30% serious distress 40% moderate distress

Eleven percent of the Victorian EFY Foyer evaluation’s cohort were Indigenous, which was consistent with the wider Specialist Homelessness Services population in that State.

Some young people are better served by Supported or Transitional Accommodation or Affordable Housing, and will not want to enter into the kind of agreement Foyers require, nor live in that form of community. It shouldn’t be assumed that Foyers are appropriate for everyone.

Youth-appropriate forms of Housing First are also relevant for this target group (MacKenzie 2020) – as, like Foyers, they go “beyond assisting young people merely to become independent but rather to enable them to make a successful transition to adulthood” (Gaetz, 2104).

NSW has a number of programs in place to make a diversity of housing and/or support options available to young people, including through My Foundation Youth Housing. All of these housing solutions are vital for the differing needs of young people at different stages of their life journey.  

What outcomes do Foyers demonstrate? 

Participant outcomes

The EFY Foyers documented the following improvements 12 months after exit:

• 46% of participants had improved their educational qualifications, with a further 24% still enrolled in further study
• 36% of participants were employed – up from 19% at entry
• 51% of participants were living in their own place – up from 6% at entry
• Housing had been stable over the previous 12 months for 59% of participants – up from 43% at entry

The EFY Evaluation is working to produce more detailed analysis of any differences in outcomes for different cohorts of young people – this will be valuable research. The EFY Evaluation substantiates previous Foyer evaluation observations that:

• Foyers can work well for vulnerable young people – when they are ready to engage with education and/or employment 
• Foyers can deliver substantially positive outcomes in the domains of housing, education and employment for young people where these things were at risk at entry.

Cost-benefit for government

The EFY evaluation addressed the previous gap in the literature regarding a cost-benefit analysis. KPMG’s analysis was based on each model delivering with 331 clients, with costs/benefits calculated over twenty years. Only the costs of service delivery were included, not the capital costs.

In the analysis Transitional Housing Management demonstrated a benefit-cost ratio of 0.97, in comparison to EFY Foyer’s ratio of 1.6. Other Foyers only demonstrated a benefit-cost ratio of 1.02 but this could be improved by increasing their average scale (EFY has 40 beds compared to <20 beds) and decreasing the average length of stay (EFY 1.2 years compared to 1.5 years).

That said, flexibility regarding length of stay is an important feature of the foyer model and often reflects the level or complexity of needs of individual residents.

KPMG estimated a Net Program Impact for EFY Foyers of $9.91m over twenty years.

This analysis is deliberately conservative.

• The likely future costs to the NSW Government alone, modelled by Their Futures Matter (2019) for a similar cohort of young people to the age of 40 years, were more than $110 000 per person greater than the average person’s costs
• MacKenzie and Flatau (2016) measured the annual cost of 400 homeless and unemployed young people over three years and found average annual health and justice costs per person of $15000. Multiplied by 50% of the EFY foyer population over just eight years (eg. from age 17 to 24) the total cost to NSW health and justice agencies would be $5m. The KPMG analysis only includes total health and justice costs avoided of $2.2m
• Lamb and Huo (2017) measured the fiscal and social costs of all young people who disengage from education and employment (not only homeless young people), and found an average annual fiscal cost to government of $10 300 per person, which for 50% of the EFY foyer population over 20 years would be $34m.   

The KPMG analysis reveals that Foyers are a relatively expensive model but that by achieving the desired results with a strategic target group Foyers generate a return on investment.

With the support of the NSW and Commonwealth Governments, Foyer Central is being independently evaluated and will add substantially to the evidence this report was able to draw on. Social Investment Bonds have been used to finance the delivery of Foyer Central so there will be close measurement of the outcomes achieved.

Further research on youth foyers is needed, especially for the diversity of foyers located within Australia (Steen & MacKenzie, 2016). Coddou et al.’s (2019) study has provided rigorous evidence of the impact of EFY foyers, but high-quality process, outcomes and economic evaluations of other models would be valuable. 

What are the implications of the research?

It is possible to achieve positive outcomes with vulnerable young people

The right options for the right people at the right time achieve positive results, respect a person’s autonomy and build (rather than undermine) their long-term independence.

Foyers are a rational policy option within a wider array of programs

Many vulnerable young people right now need more Supported or Transitional Housing than is available, while others (or the same young people in a year’s time) just need access to an affordable housing market. A range of housing solutions are needed. Even within the EFY Foyer cohort, 20% of residents accessed Transitional Housing at exit, and 16% were living there 12 months later.   

AHURI’s report (2020) argues for the homelessness services sector to be rebalanced from crisis responses to prevention, early intervention and post-homelessness social housing options and support. Foyers fit in the latter category, along with the My Foundations Youth Housing Company and subsidised rentals in the private market – both of which NSW is delivering.  

Between 30-60% of homeless young people have experienced OOHC (MacKenzie, at al. 2020). Thirty-three percent of EFY Foyer residents had a history of OOHC. While foyers are a great option for some young people exiting OOHC, Extended Care, as championed through the Home Stretch Campaign, would enable other options for more of these young people in relation to housing, education and employment, and improve their long-term outcomes (Deloitte, 2018). It would also significantly decrease the young homeless population.

Foyers genuinely assist vulnerable young people move beyond their history when they are ready to engage with education, employment and a peer community, and are not in the midst of ongoing episodes of instability. Fifty-five percent of the EFY Foyer residents had experienced crisis accommodation at some point, and 32% were living there just prior to entering the Foyer. Many young people will continue to need services which assist them stabilise before they can make longer term commitments.

Foyer’s help some people not need crisis accommodation again. This is why the AHURI report believes Foyers should be targeted to young people transitioning out of homelessness services, and established as part of place-based homelessness strategies, informed by local data and systems.  

Government needs to invest to achieve a return  

While Foyers have been shown to generate a positive cost-benefit, it is not the Foyer that reaps the long-term savings, but State and Commonwealth governments.

Income support is very low and employment is increasingly insecure and poorly paid for young people, meaning that Foyers cannot be delivered on the basis of rental returns. Steen and MacKenzie (2017) argue for the creation of sustainable recurrent funding to enable the scaling of Foyers in Australia. They note that Foyers in Australia do not have the kind of financial supports available to Foyers in the UK – where they have proliferated.

None of Australia’s purpose-built Foyers would have been developed without government investment and backing. There are a number of ways that government can invest in foyers to make them feasible. The investment can be up-front in the capital build and/or made over time via payments for service delivery.  

Foyer Central has been valuable as a current experience of the significant financial challenges of bringing a foyer from concept through to delivery, and a case study of that experience would be instructive for future work.

What scale might be strategic for NSW?

There are 15 accredited Foyers in Australia, including several under development in Tasmania and Queensland.

In NSW there are 60 Foyer units provided in the Illawarra by Southern Youth and Family Services, and 53 units provided through Foyer Central in Sydney. That is less than 120 units for all of NSW.

Overlapping with the 30 000 vulnerable young people aged 16 to 18 years transitioning to adulthood in 2017 identified through Their Futures Matter (2019), there were in NSW:

• 13 700 young people aged 15 – 24 years who presented alone to a homelessness service in 2019/20
• Almost 1000 young people who aged out of Out of Home Care in 2019/20 (DCJ, 2020), plus others who leave their placement from the age of 15 years. At any one time there would be more than 6000 people in NSW aged 16 to 24 who have exited Out of Home Care
• 6725 mothers aged 21 years or younger with at least one child in 2017

For the purposes of outlining a way forward, if we conservatively assume that in any year just 5% of young people who present alone to NSW homelessness services would be ready and willing to access Foyers as a platform for their engagement with education and employment, that would equate to demand for 822 units (eg. 20 foyers of 40 units each) – if the average duration of stay was equivalent to the EFY experience of 1.2 years.

As Foyers are not the right service for all vulnerable young people, and that additional investment in things like Extended Care will affect demand, the true scale suitable for NSW is not knowable at this stage, but the above numbers suggest it would be cautious and reasonable to create a rolling program to develop sufficient Foyers for about 240 units over the next six years.

Given this is a very conservative starting point, at five years an assessment could be made on any further investment, based on the demand and outcomes experienced. Ongoing data from existing Foyers nationally will also provide useful information for decision makers. Place-based planning would enable decisions to be made about appropriate regional and metropolitan sites and partnerships.

It would be important to balance any investment in foyers with additional investment in Extended Care and supported medium-term and transitional accommodation for young people, and to make further decisions in that context. This is why we do not immediately advocate for many more foyers – they are not the only investment required. The important thing is to start scaling with confidence within the anticipated level of demand and allow cumulative experience to inform future decisions.

With emerging evidence on foyers’ effectiveness in Australia, and more to learn about how successful youth foyers are for young people with varied circumstances, it would be sensible to scale a diversity of youth foyers with an in-built dynamic developmental evaluation to continually inform implementation and service delivery in real time. It would also be strategic to develop financial models for the capital build of new services and/or sustainable service delivery (Steen & MacKenzie, 2016).

Where to from here?

In 2020/21 the NSW Government budgeted $291.8 million for specialist homelessness services ($1.1 billion over 4 years).

Shelter NSW applauds the NSW Government’s recent investment in Foyer Central. We also recognise NSW is investing in young people through the My Foundations Youth Housing Company and Rent Choice Youth.

We agree with AHURI in urging greater investment in prevention and early intervention, including through the delivery of Extended Care. We encourage the NSW Government to consider the development of place-based strategies to address homelessness, which would provide a strategic context within which decisions regarding the location and nature of future Foyers could be made.

There is clearly scope for the further development of Foyers in NSW right now, especially as a model targeted to young people exiting homelessness services. Foyers are an important contribution to the overall mix of pathways out of life-long vulnerability.

As Aboriginal and Torres Strait Islander young people feature among homeless and vulnerable populations further research and co-design with Aboriginal and Torres Strait Islander people, led by community-controlled organisations, would help inform future delivery.

More Foyers will not occur in NSW without government investment. This would best be done as a considered strategy rather than in opportunistic ways.