Written evidence submitted by Medway Council [EXA 054]

1. What is the quality of exempt housing provision?

Given a limited framework for oversight, Medway Council assess our local provision as varying from good to poor with the majority achieving an acceptable to good level of quality.  However, there is clear concern about the quality of some of the provision in the non-commissioned/non-registered sector of this type of provision.

Medway Council were forced to act when a non-commissioned, non-registered provider housed vulnerable adults within a large, unlicensed house of multiple occupation. There were other issues with this property, however we were unable to prohibit occupation or the payment of benefit because the condition of the property did not constitute a hazardous condition.

Where in the case that Medway Council Private Sector Housing are aware that a provider with a property registered as a HMO and is also an exempt accommodation provider, the tools at the Local Authorities disposal (as defined in the Housing Act) include but not limited to:

-          Notices

-          Closures

-          Fines

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

For local authorities the issue surrounding financial viability focuses on subsidy loss. It is difficult to ascertain value for money when there are little comparisons to the true costs.

Medway Council’s annual loss on subsidy is approximately £1.7m.  Officers have strict procedures and processes for the administration of exempt accommodation claims however, their efforts are unable to generate any financial respite for the council.  The Council has money withheld through subsidy however, it is not given the tools needed to minimise the effect on its taxpayers.              

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

There are significant issues insofar as geographically providers tend to target areas where the rents are lower in the private sector. However, this is not always then reflected in the rent for the supported accommodation. Within Kent, Medway has the highest number of exempt accommodations.

4. What is the proportion of exempt accommodation that is provided by registered compared to non-registered providers, and is an appropriate balance being struck?

5. What is the proportion of exempt accommodation provided by commissioned compared to non-commissioned providers, and is an appropriate balance being struck?

Medway Council commissioned Housing Related Support provision equates to 207 against an overall provision of 1149 individual units of accommodation.  This means about 1 unit in 5 is commissioned.  Therefore, the non-commissioned exempt accommodation sector is much larger.  This is due ultimately to there being no restriction on the number of units that are permitted in any local area.

This means four out of five units of exempt accommodation in Medway are not open to any form of regulation outside of private sector housing requirements and the Housing Benefit Regulations/case law.

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

Registered vs Non-registered:

Anecdotally, Medway Council’s believes it does, simply due to the lack of control and oversight anyone has over these arrangements. The main issues and complaints we have experienced, in terms of quality relate to non-registered providers. 

Commissioned or Non-commissioned:

As the commissioned Housing Related Support provision is contract managed by Medway Council Housing Services, Medway Council can enter and view our commissioned services against our local Medway Quality Assessment Framework (MQAF).  We perform these MQAF assessments at least annually.

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

Medway Council believes that transparent accountability is lacking both in respect of the care, support and supervision provided and the rents charged.

There should be some form of acceptable standard that providers have to meet to be able to provide this type of accommodation.  As a local authority, where the landlord is unregistered, the award of housing costs essentially becomes a paper exercise. Landlords put on paper what we need to see in order for us to agree their claim.  Ideally, we would visit all schemes, however administration costs simply do not cover that as an activity.  We regularly review claims however, there is a common misconception amongst providers that Medway Council cannot review care, support and supervision which inevitably causes conflict.

In respect of rents, because Medway has such a high number of units within the area, the market can essentially decide the rent. This is a historical issue in Medway. Potential providers can ask for average rents through Freedom of Information Requests and as such target the higher rent figures.  This impacts on the rates paid by Housing Benefit because cheaper suitable alternative accommodation is not a legislative option for Local Authorities. New providers measure their rents against others regardless of the actual costs.  If the rents are not profitable based on the average, the project won’t happen.

8. How should the regulatory oversight of exempt accommodation be organised?

It could be argued that local areas would benefit from regulatory oversight being devolved to the local authority in question.  However, to do so would have a significant impact on resources considering the numbers of non-commissioned exempt accommodation services in the local area.  In addition, currently local authorities have little by way of tools at their disposal to hold against non-compliant providers, outside of HMO regulations and other matters of health and safety, further complicated by the loose guidance on what constitutes care, support and supervision.  Locally we have the MQAF that our commissioned services have signed agreement to deliver against.  Non-commissioned services have not got an obligation to deliver anything other than a minimal amount of support to qualify for Enhanced Rent Levels. 

There needs to also be some form of monitoring carried out on both the property and the support services.

There are other issues surrounding conflicts of interest between parties, such as members of boards or trustees also being property owners for the exempt accommodation provider.  There needs to be clearer and transparent oversight of these arrangements.  The HB Regulations and case law provides some guidance however, it is not definitive.

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

If the scheme is to stay within housing benefit, which it should if it is to be administered at a local level, Local Authorities need firm guidance on what constitutes care, support, and supervision.  This needs to also reflect differing care needs because currently those providing and receiving high or low support are administered in the same way.  Many care homes have deregistered, therefore escaping CQC accountability to then claim HB with very little oversight. 

There needs to be a form of accountability for all landlords, registered or not, commissioned or not.  The rules surrounding this accommodation need to be standard for all providers from property standards, care, and rents.

10. Is there sufficient publicly available information about exempt accommodation?

The information is not widely available, there are no benchmarks.  There is little information regarding the subject except from private organisations who sell their services to enable providers to adhere to the rules that are there.  These organisations know exactly what to say and provide to Local Authorities which gives little option other than to pay.

Other issues

1. The administration of speculative scheme

As an authority, Medway Council receives many enquiries from providers asking for us to provide provisional decisions or to inform whether rent levels could be acceptable in respect of HB claims.  For all requests, we are hounded and expected to help, when essentially, we are just assisting them in designing/creating their scheme.  This takes a lot of administration time however, there is an obligation on the authority to assist.  We are unable to make a decision without a claim for Housing Benefit, so this process is superfluous. However, because of the lack of information around exempt accommodation, providers feel they need local authority rubber stamping any plans.  This seems very disjointed and better guidelines for all could prevent this issue.

2. National Statement of Expectations for Supported Housing

Medway Council believe this is a good document, but there are no tools to assist local authorities by way of enforcement.

3. The emergence of lease-based agreements

The expansion of investor-led lease-based schemes where a non-profit body (normally a HA) leases accommodation from an investment fund.  This creates rents that are often far higher than the general needs open market value of the property.

January 2022