Written evidence submitted by Preet Kaur Gill MP [EXA 108]

I am writing with a submission to the LUHC select committee inquiry into exempt supported accommodation.

As you will know, Birmingham has the most units of non-commissioned exempt accommodation in the country, with safety and quality concerns rife amongst this stock and several of the city’s largest providers having been issued regulatory notices by the Regulator for Social Housing (principally regarding finance and governance issues, such as conflicts of interests and EHB money flowing to other profit-making third parties).

Over the past few years, I have worked closely with providers, residents, police, the sector and community groups with on the ground experience, to get to the bottom of why this sector has doubled in our city over recent years, and why so much of this accommodation is sub-standard and poorly managed. The causes of this are multifaceted and complex, but it is the view of me and my constituents that this inquiry is well overdue and that we need to get a grip on the issues in the sector with root and branch reform.

My closest experience of the sector was in working with the council, police and the community last year to shut down Saif Lodge in my constituency, which had become infamous in the area as a magnet for crime. We found that vulnerable residents with substance abuse and mental health support needs were being badly let down by filthy, cramped, poor quality accommodation and the total lack of support. As part of this campaign, and other similar issues across my patch, I set up an exempt campaign group with residents and conducted a number of spot-checks on properties in my constituency. Through this work, and working with the Council, MPs, providers and community groups across Birmingham, I have got to see up close how dreadfully poor much of this provision can be across the city.

In the case of Saif Lodge, we were successful in securing an order for it to be shut down. Yet, substantial time and resources went into this campaign, and it is only one example among many across Birmingham which are letting the community down.

It is clear to me that the issues with the sector are widespread and in my view systemic, and that without root and branch reform at both local and national government level more of this poor quality provision will appear.

There are examples of brilliant supported housing providers who do brilliant work to support vulnerable people in our city. But much too often these providers are let down, undercut, and risk being tarred with the same brush as the other more opportunistic landlords that have been entering this sector in recent years.

The human stories of misery – whether that be from community unrest due to antisocial behaviour, serious safeguarding shortcomings, or in the worst cases instances of outright exploitation – have moved me and much of my community. Everyone I speak to accepts that there is a real need for this accommodation, but the consequences when it is done badly are too dire, and they cannot be ignored any longer. Care cannot be provided on the cheap.

The Issues

As we know, rental levels far in excess of private sector Local Housing Allowance (LHA) rates can be yielded for exempt accommodation in exchange for meeting the loose regulatory requirement to provide a level of ‘care, support or supervision’ to claimants. The above LHA rates are expected to fund enhanced housing management associated with upkeep, while the care and support related to exempt accommodation should not be funded by Housing Benefit under current regulations. In the commissioned space it is usually expected to be covered through grants. In the dominant non-commissioned space in Birmingham, it is often that residents pay a service charge for their support out of their Universal Credit entitlement. These requirements often created viability challenges for providers, who struggled to find the money to provide adequate support while local authority budget constraints increasingly eroded funding for commissioned supported accommodation.

My experience of exempt accommodation on the ground is that both the support residents receive and the standard of the accommodation they live in is rarely adequate. In exempt accommodation I have visited, there is rarely any on-site support in these properties, people with unsuitable and conflicting needs are often housed together, and when support is provided this is often only in the form of referrals to other already over-stretched agencies. As for the quality of housing, Birmingham City Council recently uncovered 1,120 individual Category 1 hazards and 650 Category 2 hazards at the 431 exempt accommodation properties that were inspected as part of its recent pilot. In the case of Saif Lodge when I did a spot-check, this meant the hostel was cold, dirty, and damp. The toilet had been flooded and left unfixed; the smell was appalling; shared spaces were basically unusable. It wasn’t fit to live in; let alone a space to get someone’s life back on track.

From the conversations I have had with policymakers about this sector, I believe there is a growing consensus that the absence of a definition of the “care, support or supervision” a claimant gets makes it difficult to properly manage and regulate, and therefore ripe for exploitation by unscrupulous landlords looking to access public money in exchange for these hazy/minimal requirements. It means residents are often not getting the help they need, and are becoming trapped in supported accommodation that is not supporting them, when the aim should be to help residents transition to more independent living arrangements.

Another issue is the lack of a standard referral route for exempt, meaning a) residents’ needs are often not assessed properly, b) there is scope for commercial incentives rather than need to drive placements, and c) incompatible residents are being put together in shared houses as a result. The identification of £3.6m of housing benefit overpayments to exempt landlords and tenants by Birmingham City Council demonstrates the implications for taxpayers and how far this might go. Indeed, the recent Prospect Supported Housing report pointed to how people are being roped into the sector by landlords advertising their properties illicitly as “free accommodation” without mentioning the needs requirement, using online platforms like Facebook marketplace. The opposite problem is also apparent according to providers who admit to housing people whose needs far exceed the “more than minimal” test and in some cases really should meet the threshold for care.

As mentioned, the result is often residents with vastly differing and complex needs and issues sharing converted HMOs with one another, with minimal supervision or support. Given the users of exempt accommodation can range from women fleeing domestic violence, to people with learning and physical disabilities, to prison leavers, to people with drug and alcohol dependency issues, and so on – the wrong mix of residents can really hinder someone’s progress. I have heard anecdotally of convicted sex offenders being housed alongside survivors of abuse, and people with severe mental health issues being placed along with people with substance abuse problems, and so on.

In many cases, I believe a clear and well-resourced referral process would help remedy this. The CEO of one provider I spoke to is doing great work on this front, and had been looking to acquire their own assessment centres so that people’s needs could be properly reviewed before they are then placed in appropriate accommodation with the right support. This should be the ambition for everyone entering the sector, but currently people often register with good providers at short notice when in crisis, without a background, and the impetus is to place them as quickly as possible and only as space becomes available as services are often so stretched. Availability of supply drives placements rather than resident need.

Another concern frequently raised with me by authorities and the community is how often residents in exempt do not have links to Birmingham. In many cases we hear this is being driven by other agencies and local authorities who are struggling to find local placements; anecdotally we have heard of councils in London paying for people’s train fare to Birmingham as they cannot help them locally. As this committee will know, this is a symptom of the housing crisis that has increased dramatically over the past decade. More than a quarter of households in temporary accommodation in England have been placed outside of their local area – a 316% rise in a decade. In exempt accommodation, this means many residents are often estranged from their support networks, leaving them more reliant on stretched services again.

However, the problems in the exempt sector stretch beyond how it is failing the people it is meant to support. It is letting the taxpayer down too. As alluded to, there have been issues with several large providers in Birmingham with regard to governance and financial probity issues, such as the siphoning public money to for-profit businesses and with conflicts of interests. While it is welcome that the RSH is working with these larger providers to address these issues, I remain concerned that many smaller providers will escape its ambit due to its policy to focus its work on RPs with more than 1,000 units. That is not to mention the cost to the taxpayer from crisis callouts by the police and ambulance services from the failures of many exempt operators to look after their residents and manage anti-social behaviour (ASB).

As I have mentioned, the wider issues in the housing market, and the overall shortcomings regulation and governance coupled with the large sums of public money being made available to fund it, has made the non-commissioned exempt supported accommodation sector a very lucrative business for some. My personal experience of some of the people operating in the sector, and the threats I have received upon becoming more involved in this campaign, have led me to believe that there may be elements of organised crime in the sector.

This leads me to one of the principle issues that this inquiry should address, that the funding and regulatory model is broken. As we know, local authorities are being asked to process 100% DWP-subsidised EHB claims to registered providers (RPs) without a useful definition of the service it should be providing in exchange, sufficient control over the commissioning or licensing of that provision, or oversight of a referral route to help assess and provide to residents’ needs. Responsibility for the oversight of non-commissioned exempt accommodation cuts across a multiplicity of regulators including the Charity Commission, the CIC Regulator, the FCA and an incredibly hands-off and underpowered Regulator for Social Housing (RSH), which does not have consumer standards in its ambit and only focuses its engagement on providers with more than 1,000 units, allowing many smaller providers to effectively evade scrutiny. It is only after concerted campaigning in Birmingham that the RSH seemed to wake up to the issues with many of our biggest providers and issued several regulatory notices, leading to progress to be made with some of these providers, but I am certain that this will not be unique to our city and I am not convinced a functioning system would have to depend on these efforts if bad actors are not to simply shift their operations elsewhere. Currently the RSH will only take action against a registered provider in respect of significant, systemic and widespread breaches of the regulatory standards. It is not a proactive regulator of most providers in the sector, and thus effectively operates “don’t ask, don’t tell” model of regulation. This is increasingly unsustainable.

It is my view that if local authorities are to administer the EHB for exempt accommodation, it should have greater powers over that provision and where it is set up. One thing that rightly excises residents in the city, is how provision is often saturated into usually already deprived areas. This is overheating local housing markets, reducing availability of family homes for local people (with many being converted into HMOs), and causing community backlash as a result. It is my view that local authorities should be given more power to manage this sector, where currently it cannot be touched by the levers councils can pull for other areas of the housing market, such as selective and additional licensing.

The solutions

As alluded to above, the issues with the exempt supported accommodation sector are multifaceted – some are symptomatic of wider issues such as the housing crisis and the decimation of local authority-led support services over the past eleven years of austerity, and will be beyond the scope of this inquiry, while some are more particular.

The areas that I believe should be a priority for reform and should be given consideration in this inquiry ae as follows.

• Define the standards of support – In my view, we need a statutory definition of support residents can expect in exempt accommodation. DWP does not currently have any requirement for local authorities to undertake assessments or have specific processes for exempt accommodation, therefore most LAs don’t require any either. Setting clear standards in exchange for EHB is a fundamentally necessary fix, as the current hazy and easily under-cut “more than minimal” test is letting residents down and contributing to the goldrush of bad landlords entering the sector we have seen in recent years. This takes me to my next point:
• Roll out a referral process – defining the level of care, support and supervision would necessitate the introduction of a referrals and risk assessment processes, to ensure vulnerable people are housed appropriately and not with potential exploiters. Furthermore, we need to ensure protocols for statutory agencies are rolled out to create consistency, accountability and help reduce the trend of out of city placements that has put particular pressure on Birmingham.
• Strengthen the regulator – Regulation is weak, piecemeal and uneven. The RSH is under-resourced and does not proactively engage with providers with fewer than 1,000 units. Its remit should be expanded (e.g. inadequate risk assessment should be considered a failure of consumer standards), a fast-track process to strip status from non-compliant RPs should be set up, and an effective inspections regime must be established.
• Empower Local Authorities – Councils do not currently have the appropriate powers to manage the oversupply of exempt. The government should align existing planning and HMO licencing powers to capture supported housing provision. Moreover, I believe Councils should be granted faster and more effective community safety enforcement powers to tackle providers that do not effectively manage ASB.
• Review the flawed funding model – We need to ensure that funding is tied to provision that is working in the best interests of residents, that there are working safeguards in place to prevent bad actors from exploiting the system, and that HB assessors have a robust framework with which to process claims and deliver value for public money.

Conclusion

When delivered well, exempt accommodation provides a vital lifeline to tens of thousands of people – whether that is someone exiting the criminal justice system, recovering from drug or alcohol addiction or is a survivor of domestic abuse. Exempt supported housing literally saves lives, so we must make sure it is fit for purpose.

Birmingham has so far led the way in this debate, but this is clearly a national issue in need of national solutions. In my view reform of this sector has to be part of the conversation about levelling up.

I sincerely hope this inquiry is the first step towards the reforms we need to see, and look forward to the next stages.

February 2022