Written evidence submitted by the Institute of Revenues, Rating and Valuation [EXA 090]

The Institute of Revenues, Rating and Valuation (IRRV) is pleased to provide this submission to the Select Committee’s inquiry into exempt accommodation.

The IRRV is the professional body concerned with all aspects of local taxation and local benefits administration across the United Kingdom.  Institute members, in both the public and private sectors, are engaged in local authority benefits administration, local tax administration, valuation of property for taxation and other purposes, the appeals processes and financial management in local government. 

The Institute is the only professional body in the United Kingdom that specialises in the law and practice of local authority revenues and local taxation collection together with the income-related benefits that support these processes.

Please contact me should you wish to discuss any of the points raised in this submission.

Yours truly,

Institute of Revenues, Rating and Valuation Submission to the LUHC Committee Inquiry into Exempt Accommodation

About the Institute

1. The Institute of Revenues, Rating and Valuation (IRRV) is pleased to provide this submission to the Select Committee’s inquiry into exempt accommodation.
2. The IRRV is the professional body concerned with all aspects of local taxation and local benefits administration across the United Kingdom.  Institute members, in both the public and private sectors, are engaged in local authority benefits administration, local tax administration, valuation of property for taxation and other purposes, the appeals processes and financial management in local government. 
3. The Institute is the only professional body in the United Kingdom that specialises in the law and practice of local authority revenues and local taxation collection together with the income-related benefits that support these processes.

The IRRV Approach to this submission

4. A percentage of those IRRV members working in local government have responsibility for, or day-to-day involvement with, the housing function.  A larger percentage will generally only have involvement with the housing function in as far as it impacts on the administration of housing benefit claims, the administration of council tax accounts that involve council tax reduction scheme eligibility, the collection of relevant council taxes and the collection of sundry debts involving housing or related service costs.    The Institute does not have an agreed stance on the issues raised in the questions, but the views of respondents, who are experienced practitioners in the revenues and benefits fields, have been provided; and this submission looks at the questions raised from that professional perspective.

Responses to the Questions

Q1. What is the quality of exempt housing provision?

5. New council schemes are generally purpose-built, so the quality is usually good. Some of the older council schemes use old buildings that are not always updated or maintained very well by Housing Associations. One of our evidence contributors, working in a London Borough, states that some scheme still have shared bathrooms etc.  
6. Residents clearly benefit from good quality provision; with an effective housing solution, customers benefit, financially and socially.

Q2. Is the current model of exempt accommodation financially viable, and does it represent value for money?

7. The cost of the current model is excessive for many local authorities.  The housing benefit subsidy payments do not always cover costs, which are generally increasing (and so too are the number of schemes). The model is not regarded as representing value for money due to the large proportion of the rent covering expensive mortgages or leases.

8. This is an issue which the Department for Work and Pensions (DWP) has long been trying to solve. Both the DWP and local authorities are well aware that this can be an area which attracts some of the more unscrupulous landlords, who seek to take advantage of “enhanced levels of housing benefit”.  In reality what this means is that those unscrupulous landlords inflate the rents/service charges, which housing benefit staff have little, if any, chance of restricting.  The difficulty stems from the housing benefit regulations and the fact that this type of provision is often for those customers who may be classed as “old regulation 11” vulnerable customers; and whose rent the local authority can therefore only restrict if it can be proved that appropriate alternative accommodation is available for them to move to.
9. These schemes will often maintain that they have a unique element or characteristic, which means local authorities cannot compare their costs with any others, so the authority can’t restrict as it cannot find anything that quite matches. That also assumes that housing benefit staff have the time and knowledge to be able to investigate the costs properly.
10. It is fair to say that some local authorities saw an increase in supposed exempt accommodation when Universal Credit first started to take on housing costs, as many landlords feared the switch from housing benefit to Universal Credit housing costs. One local authority in south-east England reported that it only had one such scheme. However, it has recently had two other landlords seeking to be treated as providing exempt accommodation. The time and effort that is required to confirm this type of provision is significant, with on-going exchanges and requests for evidence and information.
11. It has been suggested to us that the reason exempt housing has been left with housing benefit teams to pay is because it is deemed to be too complex for the Universal Credit mechanism to deal with.  It has been further suggested that this work should be moved across to UC; whilst the caseload numbers are small, they generate a disproportionate amount of claims assessment work for housing benefit teams. 
12. The Institute is aware that there are issues surrounding housing benefit ‘full case reviews’ in relation to supported accommodation.  These are required to be returned online and if they are not, this can lead to housing benefit claims being terminated.
13. Cases selected for full case reviews are supposedly chosen on the basis of risk that the claimant is being overpaid housing benefit. The Institute does not have information about how the DWP make this assessment. In the London borough in question, however, benefits administrators are finding a high proportion of selected cases relate to claimants in supported accommodation, where the rents are high due to high levels of support services. Such claimants often find it difficult to handle online communications due, in part, to their disabilities. These claimants are also some of the least likely to have any change in their circumstances that could lead to a housing benefit overpayment. It is therefore difficult to understand why the DWP would regard them as being ‘high risk’.
14. Claimants selected for full case reviews in the respondent’s borough include disabled veterans living in accommodation supplied by veterans’ charities and people living in hostels for the homeless, including some receiving support to help them recover from addiction. It is hard to understand why the DWP might believe such tenants would be suitable for a full case review. Fortunately, the support workers these tenants have are often able to assist them with completing the online full case review forms; this would, however, appear to be an extra administrative burden for services that are already under pressure.
15. Finally, a full assessment of value for money could arguably require the views of residents to be taken into account.

Q3. Are there significant geographical and regional differences in the provision and the problems of exempt accommodation?

16. All of our respondents replied to this question in the affirmative. There can be variances within counties, with neighbouring authorities having completely different experiences, depending on suitability of stock and the specific needs of the clientele being served.

Q4. What is the proportion of exempt accommodation that is provided by registered compared to non-registered providers, and is an appropriate balance being struck?

17. The Institute does not have sufficient information to answer this question; but can add that, to its knowledge, local authorities deal mainly or exclusively with registered providers.

Q5. What is the proportion of exempt accommodation provided by commissioned compared to non-commissioned providers, and is an appropriate balance being struck?

18. The Institute does not have sufficient information to answer this question; but can add that, to its knowledge, local authorities deal mainly with commissioned providers.

Q6. How does whether a provider is registered or non-registered, or commissioned or non-commissioned, impact the quality of provision?

19. There is much more regulatory oversight with registered / commissioned providers. The commissioning team help registered providers with accessing grants to improve premises etc. so the quality of provision is better. There is more oversight in terms of the care provided as well. Some of the private providers’ accommodation is regarded as sub-standard and the care is not always regulated by the Care Quality Commission.

Q7. How should exempt accommodation be provided and what should the service cost?

20. The Institute has not set policy on this matter, but it received a variety of responses regarding this question.  In respect of two-tier authority areas, it was suggested that it should be dealt with at county level, including the payment of any subsidies. 
21. A preference was also stated for grant funding directly to the Commissioning Team, rather than individual housing benefit claims.  Setting rents with Housing Associations and agreeing housing benefit is a very time consuming process.   The same respondent stated that it should be provided by Councils /Housing Associations with costs purely reflecting the provision of the service, with a maximum set by government depending on region every year.
22. There should be acceptance that tenancies subject to voids, higher build costs, and being located nearer to services (communal facilities, onsite care and meal provision) will attract a higher rent, as the costs of providing the accommodation are higher.

Q8. How should the regulatory oversight of exempt accommodation be organised?

23. There are no doubt some excellent providers, but it is a sector which should be regulated more tightly, with a suggestion made that this could be a role for Homes England, to ensure that costs are appropriate and that the services claimed to be provided tally with what are actually provided. One respondent reported that, through interviewing tenants in the existing scheme in their local authority, it was evident that there is a vast discrepancy between what the landlord claims to provide and what is actually provided - and that scheme is run by a national Housing Association. The existing housing benefit regulations are weak and are not helped by a body of case law which providers can construe to suit their own means e.g. should the provision of a helpline out of hours be considered care, support and supervision when the tenant has profound needs and may not be able or willing to engage that way? 

Q9. What should be the regulations governing exempt accommodation and how should those regulations be enforced?

24. Regulations should cover standards of accommodation and care; the requirement to inspect and related powers to enforce.   More regulation would be helpful about suitability of providers.

Q10. Is there sufficient publicly available information about exempt accommodation?

25. All respondents agreed that there was definitely an insufficiency of publicly available information about exempt accommodation.

January 2022