Written evidence submitted by Birmingham Social Housing Partnership [EXA 067]
BSHP is an umbrella organisation of social landlords working in Birmingham. The ethos of BSHP is:
PRIORITIES: Reducing and Relieving Homelessness and Insecure Housing in Birmingham
The proliferation of non-commissioned exempt accommodation in Birmingham (which is often called the “epi centre” of a national problem) is of particular interest to BSHP. We welcome the focus of the Select Committee on exempt supported accommodation and the learning which will come out of the inquiry.
Although the inquiry is specific in terms of the questions around exempt accommodation we think, for our city, that there are other unintended consequences due to the rise in exempt accommodation, such as the loss of so many family homes that have effectively been converted into non-commissioned exempt accommodation. It is estimated that over 4000 family homes have been lost in Birmingham since 2014. During this period, we have seen a steady increase in Birmingham of people accessing temporary accommodation which currently stands at over 3000 households. This is allied to the fact that we have only had 3,272 affordable homes built in the West Midlands in 2019/20 with similar numbers preceding it, which has led to exempt accommodation often being the only housing pathway available for many that become homeless or roofless. This has impacted on people’s ability to work due the rents being significantly higher in exempt accommodation.
As we write this Birmingham has over 21,000 units of exempt accommodation in the city. To give this some context in 2019 it stood at just over 14,000 so a huge hike even whilst, for the majority of that time, we have been in a pandemic.
Through our work across the City, we know there is excellent provision of exempt supported accommodation which meets the needs of vulnerable residents by providing high quality accommodation in a communal setting with both intensive housing management and personalised support. We firmly believe that exempt accommodation provision is an important element of any housing strategy.
Our concerns however, centre around the growth of a part of this sector which fails to meet the needs of some of our most vulnerable residents. Over recent years we have seen a combination of unmet need, low Local Housing Allowance levels (particularly for single people), inadequate social housing supply and no explicit funding for housing related support since the ring fence was removed from the Supporting People programme in 2009.
These factors have been further exacerbated by current regulations relying heavily on outdated housing benefit regulations, making it extremely difficult for councils to manage the supply and the quality. This has, in some cases, led to an unacceptable ‘market response’ from unscrupulous providers resulting in poor quality accommodation, with little or no support and in some cases risky mixes of vulnerable residents causing significant impacts in some areas and communities.
The exponential rise in this type of provision is causing considerable concern in the West Midlands, with evidence growing that the model is becoming increasingly common in many areas of the country. Alarmingly this is not always recognised at an early stage, and mistakenly considered as HMO accommodation.
Nationally, FOI information published by Crisis in October 2021 shows that 153,701 households in Great Britain were housed in exempt accommodation as of May 2021. This represents a 62% increase from 2016 to 2021[1]. It is estimated that £816m has been spent on exempt accommodation in the last financial year alone. Based on responses from 52 authorities, the spend on exempt accommodation has risen by over £110m between 2018-19 and 2020-21”[2]
It is important that need is identified, and that appropriate, high quality supported accommodation is provided to meet this need. This underpins the health and social care system sustaining and promoting independent living within the community.
We believe that the combination of root cause issues and inadequate regulations can only be addressed effectively with government intervention. Guidance will not be enough to address this growing problem.
We support the proposals by partner agencies in the West Midlands and nationally, which would require government action to address the following:
The key requirements are:
This Inquiry represents an important opportunity for government to introduce changes to the way public funding is invested in the exempt accommodation sector so that the most vulnerable residents are helped to secure good quality, progressive accommodation, and support, enabling transition to greater independence and employment.
We believe this doesn’t need new money and that there are potential savings for the Treasury by using some of the core rent those local authorities gain via the current subsidy from the DWP.
Exempt Accommodation: Defining the Terms of our Submission
As the ‘exempt’ provisions of Housing Benefit have been in place since 1996 and are an established mechanism of funding, primarily, the housing-related costs of a wide range of supported housing schemes; many of which provide reputable and often life-changing services, it is important that we clearly define our terms.
Our submission, in the main, refers to:
“shared residential units that are not commissioned under Local Authority Homelessness or Social Care Funding, or under Specialised Supported Housing (SSH) arrangements, and which utilise the ‘exempt’ provisions of current Housing Benefit and Universal Credit Regulations. This provision operates, at least ostensibly, on a short-term or transitional basis, accommodating a wide cross-section of often multiply excluded and disadvantaged groups, and is often under the governance of ‘lease-based’ Registered Providers of Social Housing[3]. “
This type of supported accommodation is not ‘new build’ supply but utilises, and in many cases converts, existing buildings and homes into multiply occupied schemes.
Whilst it is our overall contention, in the remainder of this briefing, that the regulations surrounding exempt accommodation are no longer fit for purpose, open to exploitation by providers and often unable to provide the quality and levels of support required, or adequate reassurances around resident safeguarding and wellbeing, the above definition, we believe, most clearly – and most severely – exhibits the myriad of weaknesses and gaps in the oversight, monitoring and regulation of this ‘sub-sector’.
Our research publications coined the phrase ‘accountability deficit’ to refer to the cumulative weight of these gaps in scrutiny, oversight, regulation, and monitoring.
Housing Benefit and Funding for Support
Other Regulation and Oversight
Safety, Wellbeing, and Risk
Existent Environment and Push Factors for Growth/Utility of Exempt e.g.:
We have to ask the question – why is there so little scrutiny over public money that is there to fund the housing of often very vulnerable and marginalised groups? *
RECOMMENDATIONS: Focused answers to inquiry terms of reference:
The quality varies considerably. There are good landlords who use the rent funding to invest in their exempt stock and the housing management service. These landlords will have developed the accommodation in consultation with their Local Authorities and will generally tend to meet lower-level support needs. If they have no commissioned support, potentially because the LA has limited or no support funding, they may fund support from charitable sources or floating support may be provided by other agencies. Intensive housing management is likely to provide a level of oversight and supervision. Many providers although not commissioned will work closely with the local authority to meet the support needs of vulnerable people.
However, there are providers both registered and otherwise who do not spend the money they receive on delivering the support to who it was intended for and who see this as a means of generating significant income, far in excess of HMO and LHA rent levels, without the commitment to the application of the rent or indeed eligible service charges, for the purpose intended. The quality of many of these properties is well below any known standard. Although the Regulator Social Housing is now taking direct action on those that are registered social landlords, (not all are) - there is still a gap.
We think it would be useful if there was a licensing scheme (much like there is for HMO’s) For non-purpose-built supported housing, re house conversions. It’s also appropriate to consider “Fit and Proper Persons” tests for directors of private limited companies that are operating non-commissioned supported housing.
There is also a more nuanced question as to whether brand new companies/entities should be allowed to start claiming public money (via HB) without registering with a LA first and becoming an accredited supplier.
Where support is commissioned separately and the quality of accommodation meets high standards and is well managed, it does represent value for money as the higher rents reflect higher costs of managing this type of accommodation, including the communal aspects, additional housing management services and higher turnover as residents progress and move on. The current model is only financially viable if the support is funded separately and there is oversight and regulation to ensure that the rents and property charges are used to provide good quality accommodation.
However, we are seeing significant growth of a model of non-commissioned exempt accommodation where the higher rents are not used to maintain high quality accommodation and where some of the most vulnerable residents are accommodated in some of the poorest housing, without adequate support, trapped in unemployment and ironically all paid for by central government.
Nationally, FOI information published by Crisis in October 2021 shows that 153,701 households in Great Britain were housed in exempt accommodation as of May 2021. This represents a 62% increase from 2016 to 2021[4]
Often people are going into exempt accommodation as it’s the only route they have available to them. Their only support need may be that they are homeless. This becomes costly as supported housing “exempt rents” make work and training prohibitive for most. Affordable housing completions for the West Midlands were at a paltry 3,272 in 2019/20 which isn’t even really Covid related as the previous two years have been comparable with,3,714 in 17/18 and 3795, in 18/19. Out of those only 710 were at social rent which gives the most opportunity for social mobility for those in paid work. Allied to this, the loss of private sector homes, due to conversion to shared exempt, (Birmingham estimates the loss of up to 4000 private section homes since 2014) has meant that those in temporary accommodation has steadily risen during this period. The loss of affordable homes through Right to Buy has also contributed to the increase in people ending up in exempt accommodation due to necessity rather than need.
Over 150,000 households in controversial exempt accommodation | Crisis | Together we will end homelessness; October 2021
The exponential rise in this type of provision is causing considerable concern in the West Midlands, however, evidence is growing that the model is becoming increasingly common in many areas of the country as investors and providers see the opportunity and unmet need. For many LA’s it’s become an important part of their housing strategy following the withdrawal of the Supporting People Programme after the ringfence was removed in 2009 and austerity measures were in place for nearly all LA’s.
The 5 pilot areas provide examples across different regions and have taken a lead in addressing the issue and much learning is coming from their work. Investors and potential providers contact us regularly believing that there are opportunities for them. The yield they expect is unrealistic. We are also aware that many LAs and some providers still see this as an HMO issue, and it takes some time to realise what is actually happening. Some LAs are desperate for provision to meet local need and do not have the resources to commission support.
Unmet need, low LHA levels particularly for single people, inadequate social housing supply and no explicit funding for housing related support since the ring fence was removed from the Supporting People programme in 2009, are combining to encourage the growth of non-commissioned exempt housing. Current regulations rely heavily on outdated Housing Benefit regulations and make it extremely difficult for councils to manage the supply and the quality.
The combination of root cause issues and inadequate regulations can only be addressed effectively with government intervention. We believe that this could be done by taking some of the core rent from the DWP subsidy and giving this back to LA’s to effectively administer a regulatory regime for all types of supported housing. This would ensure that no new money is required but provide a re-profiling of the current rental model to allow for a subsidy grant to LA’s. We also think it’s important, in particular, for generic homeless non-commissioned exempt housing, that a LA can turn down legitimate claims if they can evidence that there is enough provision in their area.
In Birmingham, it was found that there were 21,317 units of exempt accommodation and that 19,760 of these units (equating to 93%) are within the oversight of Regulator of Social Housing (RSH) regulation [scrutiny inquiry]”.
We don’t actually know the national figure – as data is not readily available. But its likely due to housing benefit subsidy rules that Registered Providers will provide the majority of exempt accommodation in most local authority areas.
Birmingham: 94% non- commissioned, 6% commissioned (best estimate based on pilot evidence)
Although, this is not to make the forced binary between commissioned and non-commissioned as ‘good’ vs ‘bad’ but, broadly, non-commissioned is the most problematic element of the sector and by definition the least regulated. Neither provision is inherently more problematic or better than the other, but in terms of having greater assurances and at least “some” form of oversight and regulation, RPs are preferable to either stand-alone charities or CICs, however, LAs may have a different take on this in terms of subsidy losses
LAs often don’t get to make the decision of whether an ‘appropriate balance’ has been struck because they don’t have the money to commission as much as they need to.
If commissioning is done well, then of course it offers more assurances so ideally more commissioned would be better. However, there must be caution against creating a false binary between commissioned = good and non-commissioned = bad. Many great schemes are not commissioned (for a wealth of reasons, and also not all Domestic Abuse provision should be under LA control as it is a national resource). Until the government gives sufficient money to LAs and this is ringfenced, there will always need non-commissioned services. !
There is also an argument that non-commissioned can be cheaper and also can be more flexible and innovative with its work.
Broadly, standard, generic homelessness services should all be commissioned/under the purview and monitoring of the LA, in an ideal world and there would be exceptions for more specialist provision like domestic abuse, mental health, drug and alcohol rehabs because LAs quite often do not have the budget or in many cases the expertise to commission these types of services.
It is important to bring the subsidy issue in. LAs may favour RPs and scrutinise less due to the subsidy issue but this is without the guarantees that RPs provide the levels of quality, probity, etc that would be expected. The subsidy issue needs highlighting because it is grossly unfair and based on a now very outdated assumption that RPs are well-regulated and able to sufficient monitor and address issues with this type of accommodation. It creates an incentive to go ‘under’ an RP, disincentivises LAs from scrutinising claims and potentially represents a disinvestment in some really valuable forms of accommodation (e.g., refuges).
It is arguably the case that non-profit bodies that are only regulated by the Charity Commission, Office of the Regulator of Community Interest Companies etc. do not have anywhere near the scrutiny RPs do and arguably such entities are not set up to oversee these types of issues. RPs are better regulated albeit not specifically in terms of the people and, as seen, there has been a lot of failure in this sector, that regulatory involvement can’t currently reach (although this may change with the White Paper but not so much with this sub-set of the RP sector).
If RSH had stronger powers, then more should be under RPs - not necessarily the lease-based RPs as things currently stand
Essentially, it really depends on priorities, viewpoint and fundamentally, what is needed in an area - which becomes the key issues – LAs have no powers to control provision in an area based on strategic needs assessments and some form of accreditation.
There aren’t the automatic assurances that RPs provide high quality accommodation and support. The regulatory judgements for many of the lease based registered providers in Birmingham show that there are some deep-seated problems with RPs in the sector and that it is all very reactive, i.e. there is no way to provide the assurances at the point of claim with RPs. LAs don’t have any powers or duties to check quality, to liaise with the Regulator etc. prior to paying out claims.
And of course, the Regulator’s powers do not extend anywhere near the quality of support/ quality-of-life issues for residents. This is where the case for consumer regulation set out in the White Paper is so important, incorporating specific measures for this type of accommodation and this client group. However, the White Paper is primarily focused on what we define as general needs tenants rather exempt supported accommodation tenants.
There are issues with CICs and the lack of accountability with that particular business model.
It’s important that exempt accommodation isn’t viewed as a monolithic entity or an alternative phrase for a vast range of temporary, supported, and homeless-type accommodation when this is not actually the case. Therefore, the question is essentially flawed. Refuges are expensive because of the nature of the work. Working with ‘complex needs’ is, if done properly, expensive but it needs to be so.
It should therefore not be a question about what it costs but about cost being commensurate with the service provided and for these to be, as far as possible, benchmarked.
Greater scrutiny over service charges, greater monitoring over what is being provided and how much this costs, greater attention to what is needed in an area, etc all need to be considered within the scope of this question. It would not be feasible to have a flat rate, which is what this question appears to be implying. The sector is so variegated that to do this would potentially be misguided.
The pilots have required LAs to carry out a supported housing needs assessment and develop a supported housing strategy. This should underpin the development and provision of exempt accommodation. The Housing Benefit regulations should be updated to clarify what level of support, care or supervision is required. Government needs to address the support funding gap. If it were to, it could re-direct the current spends on non-commissioned poor provision into the provision of good quality supported accommodation which is commissioned to meet need. LA’s should have some control but not total control re exceptions around specialist services DV, LD. Long stay supported living as part of the NHS care plan to close long stay hospitals should be separated out, - focussing strictly on generic homeless provision
Consideration of a government national accreditation requirement for providers supported with additional regulation need to enforce this. Oversight of the provision and development of supported housing should be within the remit of Local Housing Authorities, based on a duty to assess the local need for supported housing and development of a supported housing strategy, which meets local need and includes those who cannot remain in their local areas, for example refuge provision.
As per the question above, enforcement should be via:
Distinctions between exempt, HMOS, RPS, supported housing, care etc become elided in the public consciousness, which can both mask the scale of problems and leave residents, communities and stakeholders feeling without recourse or redress.
January 2022
[1] Over 150,000 households in controversial exempt accommodation | Crisis | Together we will end homelessness; October 2021
[3] See Raisbeck, T (2019) Exempt From Responsibility? for further details of lease-based RPs in the exempt sector