On 10th of March 2022 Jack Simpson wrote in inside housing about the report of supported housing getting leaked and what it tells about the problem of exempt accommodation. According to him,
The government launched a pilot programme in six impacted council areas little over 18 months ago to discover methods to better monitor and regulate exempt and supported homes. Inside Housing got a leaked report from the pilots, which provides valuable insight into how this type of housing is implemented across the country.
The fast expansion of exempt housing across the country has been enormous, but mostly unnoticed. It has become an important way of providing housing for persons who are the most difficult to accommodate under allocation guidelines after the ringfenced money was removed through the Supporting People fund.
Exempt housing has provided a roof over the heads of tens of thousands of persons who have recently been released from jail, are escaping domestic violence, or are refugees. While many providers give high-quality housing and outstanding support to some of society’s most vulnerable members, others have misused the system and exploited those who are most in need.
Because rents are not capped because of the support component of the housing, some landlords have been able to charge exorbitant rents, knowing that they will be reimbursed by the government. This is frequently due to poor-quality housing and inadequate – or sometimes non-existent – support.
The government took action 18 months ago as the problem of shady landlords became more widespread. It established pilots in five of the worst-affected towns and cities as part of this effort to examine methods to better govern and regulate exempt and subsidised housing.
These pilots have now come to an end, and Inside Housing has obtained a leaked report summarising some of the findings. The report was published in November of last year, and the Department for Levelling Up, Housing and Communities has stated that it will not comment on leaks and that a more comprehensive and updated report will be released next month.
The draught version, on the other hand, provides not only crucial information on what councils accomplished throughout the experiment, but also valuable insight into how exempt and assisted housing are managed across the country, and how some people are taking advantage of it.
Exempt housing is available all around the country, not only in Birmingham.
Five councils were given funds as part of the experiment to support their work monitoring and managing supported and exempt housing in their communities.
Birmingham, Bristol, Blackburn, Blackpool, and Hull were the cities chosen, each with slightly distinct difficulties and, as a result, different pilot-supported activities. Blackpool’s work, for example, concentrated on uncovering fraud involving exempt housing and giving expert housing benefit assistance in this area.
Bristol’s efforts centred on ensuring the safety of persons who resided in these properties and engaging with providers around claimant support. In Birmingham, for example, the city council investigated significant organised crime tied to exempt housing complexes.
What are the three different sorts of exempt lodging providers?
There are three sorts of exempt accommodation providers in the sector, according to the research. The “provider of concern” is at the top of this list, and it was this type of provider that dominated negotiations with councils.
In order to support claims, this type of supplier is described as one who may “falsify facts,” demand exorbitantly high prices, and hide profits.
According to the research, these providers take advantage of the plan by exploiting gaps in the housing benefit system, and they are frequently unresponsive to property inspections or proof of support warnings. They also tend to encourage a “revolving door” for some supported housing tenants, according to the research, and are the major targets for legal action taken by authorities.
When confronted, these providers prefer to invest substantial sums in legal and consulting services to support their work and avoid retaliation.
The second category of providers is referred to as “misinformed providers.” These companies routinely break terms, however it appears that this is more due to a misunderstanding of the rules than anything else. These organisations frequently seek for the wrong type of assistance on behalf of their people, or fail to follow fire safety regulations. According to the report, when enforcement action is taken against certain providers, they are more likely to accept feedback and change.
The “ideal-type providers” are the third type. These businesses prioritise the tenant, provide fair rents, are able to produce proof of support quickly, and typically provide high-level service.
Even with these providers, the research warns that there is a risk of tenant institutionalisation and that licencing and planning regulations are sometimes misunderstood.
The exempt accommodation system is squandering public funds.
One of the pilots’ main goals was to look into the question of value for exempt and assisted housing. Because of the nature of exempt accommodation, a provider can claim an exemption from standard housing benefit caps from the Department for Work and Pensions (DWP) or the council provided it provides a limited level of support.
According to a survey conducted by Spring Housing Association and the charity Commonweal Housing in 2019, some providers in Birmingham were charging as much as £200 per week, despite the fact that the Local Housing Allowance ceiling for shared accommodation is only £57.
Every year, tens of millions of pounds are sent from the DWP to exempt suppliers. According to the most recent assessment, it is worth £800 million every year. And a significant portion of this is lost due to providers who do not give adequate support.
In total, 22,699 exempt accommodation requests were reviewed in the pilots, with Birmingham accounting for 21,628 of them. Blackpool, with 622 residents, was the closest other local authority.
According to the pilots, the additional resources provided councils more time to scrutinise and review providers who were making claims.
A closer examination of some of these statements led to a review of a large charity that provided this accommodation in Blackburn. Following this, it was discovered that it was not supplying specified exempt housing. The study also recommended two housing associations to the regulator, one of which was downgraded as a result of the referral and the other of which was under review at the time the report was written.
Across the pilots, a total of 23,677 housing benefit reassessments were completed. The claims were decreased in 1,534 cases, and the claims were judged to be ineligible for assisted housing exemptions in 1,285 cases. Furthermore, 225 claims were denied outright due to a lack of support or a provider’s failure to give sufficient information.
The research did, however, point out how some long-term profit-driven providers could be able to work around the new restrictions by developing new structures that work inside the legal framework. The report also mentioned the growing number of real estate investment trusts operating in the area, claiming that it was difficult for authorities to decipher the complicated lease agreements, which “inflated rental costs because they included lease charges designed to generate profits for investors.”
Providers that do not meet the industry’s standards are increasingly being ejected.
Those previously mentioned ‘providers of concern’ would be barred from supplying exempt housing in an ideal society.
However, as the fast growth of this sort of lodging has demonstrated, they have not been stopped in recent years. This has frequently been due to a lack of resources to stop them, or a lack of means to intervene.
According to one section of the report, the lack of regulation does not prohibit concern providers from establishing themselves without consulting the council and claiming uncapped rents with minimal questions.
However, the pilots allowed authorities to be more selective about which types of providers entered the industry. It was widely agreed that once landlords had established assisted housing, it was difficult to deal with poor-quality or unscrupulous landlords.
However, there were some victories in preventing them from starting in the first place. For example, when a new player wished to set up an exempt facility, Blackpool established a new system that required them to go through only one access point. The council was much more picky about the providers at this point, and it calculated that it saved £2.5 million as a result.
Even in Blackpool, though, the council cautioned that some of the providers it barred ended up in other areas where there was less severe gatekeeping.
The fastest-growing area for new providers is Birmingham. The council revealed that over the duration of the trial programmes, it received 390 applications from new providers. Only 62 of them received housing assistance, with 211 being flatly refused and the remaining 117 having their rents restricted.
Despite this work, the number of claims increased during the period, demonstrating that gatekeeping does not always prevent excess in the city, according to the research.
The quality of exempt housing is widely regarded as a problem.
One of the most important things the pilots allowed the various local governments to do was to boost the amount of inspections performed on their sites.
Hull was able to treble its number of inspections to 322, Blackpool stated it raised inspections significantly, and Birmingham, which increased its inspections team from two to nine inspectors, completed 517 inspections, more than double the 250 it expected to complete without assistance.
A total of 1,025 property inspections were conducted across all local governments. When examined against the Housing Health and Safety Rating System, which is used by councils to assess the standards of houses, the inspections discovered a number of concerns.
There were 2,926 ‘category one’ and ‘category two’ risks discovered in all. Worse yet, 1,648 of these were category one dangers, meaning they posed a “severe and immediate” threat to a person’s health and safety. Birmingham took the lead once again, with 1,532 of the 1,648 votes. At the time the report was produced, 876 of these dangers had been removed.
Five hundred and thirty-six of the 1,278 category two dangers had been removed. However, in response to the evaluation, pilot authorities indicated that the providers with the lowest property standards were generally the most difficult to work with, and that there was a lack of enforcement available to take action against them because their standards were poor but not unlawful.
Only 76 official actions were taken across the pilot, but 489 informal actions were taken, the vast majority of which were carried out by Birmingham and Hull.
Some providers receive funds but do not always give assistance.
Exempt housing is more than just providing shelter; it also includes a level of care that must be met. However, there is no consensus on how much assistance should be provided.
To be free from housing assistance, the guideline indicates that the accommodation must provide “more than basic” or “trifling” care and support.
However, as the pilots demonstrate, different areas see this differently. In Bristol, for example, “greater than minimal” is defined as two to three hours each week. It is regarded as one hour in Birmingham.
It’s also easier to get providers to establish they’re providing the necessary degree of support than it is to prove they aren’t, according to the research, especially when renters are “possibly compelled to testify.”
For the first time, the pilot revealed the extent of tenant dissatisfaction with the assistance they were receiving. A total of 220 complaints were received, the majority of which originated in Hull (99).
Those who live in this type of accommodation, on the other hand, are thought to be unwilling to complain or unaware of the channels through which they can do so.
452 actions were done in response to the complaints to encourage providers to improve their care quality. With 224 actions, Hull once again led the pace.
More regulation is being called for.
One of the major concerns raised by many in the exempt sector is that the available regulation is insufficient, making it simpler for providers to operate. According to the research, “unclear and absent regulation constituted a hurdle to councils,” because providers were “legally and practically unaccountable.”
This was discussed in the part about the challenges that could arise if provider concerns needed to be escalated. Authorities claim that pursuing providers through legal channels to resolve complaints is time consuming and costly.
Councils also believed that if they went to court, they would lose because of the “lack of legally binding standards” surrounding subsidised housing. What constituted “greater than minimal” support was frequently a matter of judgement, and all of the authorities cited a lack of clarity as a major concern.
According to the paper and the councils involved, a precise definition of “greater than minimal” help is needed, giving them additional flexibility to reject exempt claims if a provider does not satisfy the standards.
Court cases frequently rely on difficult-to-gather evidence from renters, and providers frequently pay for expert legal representation in court.
Exempt housing is filling a need in the housing market.
There are certainly difficulties with exempt accommodation, whether it is providers trying to cheat the system to line their pockets, or dreadful housing conditions that the most vulnerable in society must endure, or a lack of the amount of care needed to improve their lives.
Exempt housing is picking up the slack in the absence of affordable housing and finances for commissioned support. In many circumstances, this is accomplished by good accommodations and providers, but in others, it is accomplished through inadequate provision.
However, as many participants in the pilots recognise, increasing regulation and scrutiny may have an impact on the types of housing that are accessible. Stronger gatekeeping of new participants entering the sector, according to the report, could lead to a shortage of supported housing in some locations.
While increased regulation will “ensure renters are getting a good degree of support,” it may result in some potential assisted housing tenants being left without homes at all, according to the report.
“It’s a bit of a double-edged sword really,” one council worker interviewed for the report says, “because many have stated it’s better than living on the streets even if it’s a whole dog’s supper of a house and there’s no assistance.”