Written evidence submitted by Sunderland City Council [EXA 033]

Sunderland City Council Response – This response refers to specified supported accommodation, not just specified exempt supported accommodation

Levelling Up Committee: Inquiry into Exempt Accommodation

• What is the quality of exempt housing provision?

The quality of provision is polarised. Many providers offer quality services, whereas others provide poor, and often a concerning standard of accommodation and support. In Sunderland we find that commissioned services are well manged and provide the service which is required. This starts from a robust evidence which the Council hold and maintain. This allows us to commission services which meet housing and support needs.

‘Issues’ tend to arise in non-commissioned services, from providers who ‘pop up’ in the City with the intention of providing a service which enables them to fill their schemes and garner a good rental return. These services arrive, we have no controls and are often grounded in the provider making a good financial return and not meeting a housing and / or support need.

We are seeing a rise in private property investors encouraged by the promise of high returns by property consultants. Properties are being bought and sold, sometimes on the same day, at a massive profit with a lease attached. The housing providers that take on these leases put profits before the needs of residents. The housing conditions are often found to be poor and either no support is provided or, the little that is, is ineffective.

The HB team is essentially having to act as the gatekeeper, which is very resource intensive, to try and prevent unwanted schemes coming into the City as legislation is not fit for purpose in this regard. Councils need to have some control over who sets up and operates a service their area.

• Is the current model of exempt accommodation financially viable, and does it represent value for money?

The current model is not financially viable and does not present value for money for the public purse.

The model allows poor providers to exploit the HB system by charging high rents. Also, some providers who provide high quality services but are not commissioned struggle to obtain funding for support costs which means some proposed new schemes, which would be welcomed, can’t cover their costs and are therefore not financially viable. Some providers try to hide support costs as an eligible service charge within the rent which can become very resource intensive for HB when assessing these charges. 

The legal requirement to pay HB combined with the lack of full subsidy results in a disproportionate share of supported exempt accommodation funding fall on the Council. This may impact on budgets and hence on the level of resources available for other services, which the Council has no control over. The current pressures on the Council’s budgets exacerbate this. Councils are left with the burden of paying for substandard schemes that they do not want or need, which also negatively impacts on other resources within the City due to the poor manner and communication in which the schemes are ran. 

Exempt accommodation is the most complex area of HB which places a very high administrative burden on Councils.

• Are there significant geographical and regional differences in the provision and the problems of exempt accommodation?

Officers from Sunderland have spoken to most other Council’s in the North East regards this issue and it’s clear that all are experiencing similar issues. Unsolicited providers arrive in our areas and try to make a quick buck, without interest in creating a long-term partnership with Councils or in meeting housing needs.

It seems the only variation in approach is that the more organised Councils, who can stretch limited resources have been able to adopt a more robust approach, working across the departments within the Council to scrutinise new schemes and the effect they could have in the local area. If additional resource was available, greater scrutiny could be adopted and stepped-up.

• What is the proportion of all specified accommodation that is provided by registered compared to non-registered providers, and is an appropriate balance being struck?

Just over 80% are Registered Providers and just under 20% are non-registered. We feel that the appropriate balance is being struck.

• What is the proportion of all specified accommodation provided by commissioned compared to non-commissioned providers, and is an appropriate balance being struck?

Approximately 48% are commissioned and 52% are non-commissioned. We would prefer a higher percentage of these schemes to be commissioned as this would provide great control and oversight of provision in the City. However, to do this Council’s would require increased financial support.

• How does whether a provider is registered or non-registered, or commissioned or non-commissioned, impact the quality of provision?

As mentioned above, the difference between commissioned and non-commissioned service can be stark depending on the provider. Commissioned services tend to provide ‘better’ services which meet their commissioned requirements. However, some who are not commissioned can cause problems. The current situation allows providers to arrive without any strategic thinking behind them and no regard to meeting a housing or support need. Subsequently, schemes can be established to accommodate a client group which isn’t in need or prevalent in the area. The provider then widens its net and looks out of borough for residents, diversifies its client group and makes conflicting placements which put people at risk. i.e., vulnerable people placed beside perpetrators of violence and other offences.

Most registered and non-registered providers are reputable and are in it for the right reasons. The less reputable ones, who are only in it for financial gain, cover both registered and non-registered providers.

• How should exempt accommodation be provided and what should the service cost?

Councils need to have some form of control over who operates within their area and what type of service is provided to ensure that meeting the needs of all (often vulnerable) residents are prioritised and the public purse (via the Housing Benefit bill) is protected.

The following should be considered:

• Explore introducing a motion in line with Article 4 direction across all the local authorities to ensure that all residential homes require planning permission before they can be converted into a House in Multiple Occupation. This would allow the local authority to have greater control over the growth of the HMO market, including but not limited to exempt accommodation, allowing for greater stringency and monitoring).

• Develop a ‘Charter of Rights for Residents living in Exempt Accommodation’ and supporting guidance for providers and landlords which must be adhered to. This should focus on outlining the highest aspirations for both resident experience and the exempt sector as a whole.
• It would provide guidance to help exempt accommodation providers and landlords consolidate, clarify, and build upon their existing practices to help ensure that they are able to respond to their residents safely, effectively, and consistently, and identify clear linkages between management practices and resident experience.
• Council Housing Benefit teams should be funded to develop ways to incorporate client input and feedback during assessment and monitoring of ‘exempt’ claims? Plus, resource to provide the required level of scrutiny on all benefit claims.

• How should the regulatory oversight of exempt accommodation be organised?

It needs to be regulated, with standards and checks in place. Similar to social housing sector or CQC. However, the Rent Regulator needs to be given more powers which allows them to have more control.

Providers should go through a rigorous assessment process to obtain approval from the Council to provide schemes within their area.

For any potential new schemes, providers should apply to the Council for permission to proceed, in the alternative, this could be decided by a panel consisting of the Council and its partners e.g., NHS Trust, Probation Service etc. This should also go through a rigorous assessment process and Councils should be given powers to prevent schemes from proceeding.

There needs to be a legislative requirement and resources available to allow Council’s to monitor all non-commissioned schemes in their area/s.

• What should be the regulations governing exempt accommodation and how should those regulations be enforced?

Via a regulatory body similar to the Regulator of Social Housing.

HB regulations

The HB regulations need to be amended:

to tighten the definition of exempt accommodation and they need to interact with the Rent Standard. A loophole allows registered providers to claim exempt accommodation funding on their privately rented stock as the regulations place no requirement on the property to be social housing. This needs to change.

providing care, support and supervision on or behalf of the landlord needs to be clearly defined

to make it easier for Council’s HB teams to restrict rents and remove the penalty when restricting. Councils have limited ability to restrict rents because there is little ‘suitable alternative accommodation’ available, and staff have difficulties in identifying accommodation at a lower cost, but which remains suitable.

to allow Metropolitan Councils to meet the landlord status for schemes to be classed as exempt accommodation

• Is there sufficient publicly available information about exempt accommodation

We would welcome further clarity to provide an answer.

January 2022