PARLIAMENTARY DEBATE
Supported Exempt Accommodation - 9 February 2022 (Commons/Westminster Hall)

Before we begin, I remind hon. Members to observe social distancing and to wear masks. I will call Shabana Mahmood to move the motion, and will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates. Members who intend to speak should have asked for permission from the Minister and the Member who secured the debate. I call Shabana Mahmood to move the motion.

I beg to move,

That this House has considered regulation of supported exempt accommodation.

It is a pleasure to serve under your chairmanship, Ms Fovargue. I am pleased to have secured the debate today to discuss something that is a huge problem in my constituency, in my city, and in many other places across the country.

If someone had asked me a few years ago what supported exempt accommodation was, I would not have been able to tell them. I know it confuses people even now. Given my difficulties in dealing with the issue in my own constituency, I have become quite a world expert. I will set out for all exactly what we mean when we talk about supported exempt accommodation.

Supported accommodation is a broad term that describes a range of housing types: group homes, hostels, refuges, sheltered housing, and so on. An offshoot of supported accommodation is referred to as “exempt”. It is basically a resettlement place or accommodation provided by a council, housing association, charity or voluntary organisation, where a person or organisation provides the claimant with—in theory—care, support or supervision. I say “in theory” because too often that is not the case in reality, and that is what I will discuss in detail in my speech.

Exempt accommodation is supported housing that is exempt from housing benefit regulations. If we provide someone with that type of housing, we get access to enhanced housing benefit and can access more money to house this group of mainly vulnerable tenants who are in need of care, support or supervision. We can see why that has happened. The cost of housing vulnerable people—care leavers, women fleeing domestic violence, ex-offenders, people with addiction issues, and so on—is higher. The costs of helping those individuals are higher, so the exemption from housing benefit regulations—the ability to access higher payments to house such people—was designed to allow providers to access adequate sums of money to help individuals as they seek to turn their lives around. Too often, that is very much not what happens in practice.

I stress that there are some good, legitimate providers of this type of housing, who do important work with people in desperate need of housing and help. There are still those who are committed to a social and indeed moral mission to help people to get back on an even keel, recover from addiction, turn their lives around and play a full part in society once again. However, there are too many rogue—I describe them as cowboy—providers who have clocked that this is a lucrative money-spinning opportunity and who take full advantage. They get access to larger sums of money to house housing benefit claimants who need care, support or supervision, and then they do not provide it.

In law, it is the case that all a provider has to do is provide care, support and supervision that is, in legal terms, “more than minimal”. Those three words have plagued me as I have navigated the complex world of supported housing while trying to help my constituents—those who live in such properties and those in communities where there is a proliferation of those types of properties.

That is the nub of it, is it not? The hugely greater rents and support that landlords can get means that families are priced out of streets, and the problem spreads rapidly down these streets. The behaviour of many of those who get no support makes those streets places where people no longer wish to live. My hon. Friend talks about shady landlords, but is there not a real danger that there is so much money to be made now that organised crime is moving in, in a big way?

My right hon. Friend is exactly right. I will come to his point about the connection with organised crime, which is becoming a real problem. He is right that the distortion in the housing market in these communities means that working families are being priced out of good, viable family homes. Other social tenants cannot access them either; when a person cannot get enhanced housing benefits, they are subject to the local housing allowance

In fact, this lucrative loophole is causing huge problems not only for the tenants, who often get trapped in unsuitable properties, but for the communities living in those in those areas and those who might wish to live in them, too. It is exactly those nefarious operators moving into the sector who are causing problems in my constituency and across the country.

In practice, “more than minimal” means hardly anything at all. I have heard providers say that installing CCTV in communal areas or having a manager who might visit the property once in a blue moon counts as adequate supervision of vulnerable people. That sort of so-called supervision would certainly pass the “more the minimal” test, but the idea that that is what was meant by the regulations that determine access to larger pots of housing benefit is utterly outrageous.

Cowboy operators know that they can access more money per tenant, and they do not have to spend very much—or indeed anything at all—to demonstrate that they are providing care, support or supervision. So, what is the upshot? Lots of cash is available for those who know how to game the system.

I thank my hon. Friend for her intervention and her work in this area. I know of the shocking case in her constituency. It really speaks to the problems caused by providers in this sector not doing what they are supposed or intended to do. I will come on to the regulations that I think need to change later in my speech, and I very much hope the Minister will take those on board.

If someone knows how to game the system, the next stage is obtaining properties, which these providers do by leasing them from owners. With that lease-based model, providers do not have to shell out large sums of money to buy property of their own; they do not have to spend lots of money adapting it, either. They simply lease houses, turn them into houses in multiple occupation—or HMOs—and, frankly, watch the money roll in.

This is the other aspect of the exemption in relation to this type of housing: providers are exempt from not only housing benefit regulations but other regulations, such as planning and licensing laws that enable councils in other areas to limit the types and proliferation of HMOs. Those rules do not apply to supported exempt accommodation. Having a so-called article 4 direction in a city or area—as we do in Birmingham—does not stop the proliferation of this type of housing.

In theory, we can see what was being attempted with those rules: to provide more money to cover the additional cost of housing associated with vulnerable tenants, and to allow enough appropriate units to be set up to ensure that an adequate quantity of housing is available. Again, however, that is not how things have worked in practice. The exemption from licensing rules and regulations that applies to other types of HMO does not apply here. Whole streets and communities are becoming saturated with family homes converted into HMOs providing exempt accommodation, housing vulnerable tenants and creating problems for the whole community, while failing the tenants by placing them at risk of very real further harm. It is a system that is failing everyone.

I thank my hon. Friend for securing this important debate and for the fantastic work she has done on this matter. As she said, I was alerted by constituents to the rise in crime because of some of these properties, with drug dealing, begging and sex work taking place. I undertook a spot check and saw first hand vulnerable people who were not getting the support they need and living in really substandard, filthy conditions—somewhere none of us would actually choose to live. It was only with West Midlands police, Birmingham City Council and our local residents that we got that place shut down last year. It is the first in the country that we have been able to shut down. Does my hon. Friend agree that the sector is fundamentally in need of reform and that we cannot put this task off any longer?

My hon. Friend has been doing huge amounts of work on this issue in her constituency. Many of my Birmingham colleagues are in this Chamber today. This is a big problem in our city, and I thank my colleagues for their interest in this debate and for the work they are doing in their own constituencies. My hon. Friend is absolutely right about regulation, and I will come to some of the regulations that will be needed.

Some might be thinking that there is surely someone regulating the system and carrying out the very checks to which my hon. Friend just alluded. There is a regulator for social housing, but it simply does not have the powers to deal with rogue operators, because those people know how to game the system. They have set themselves up as small operators, so they are outside of the direct purview of the regulator. They can make lots of money with little to no scrutiny, which is leaving too many people in my patch in utter despair. More than 150,000 households in the country are living in exempt accommodation—this represents a 62% increase in five years—and there are 1,600 such properties in my constituency alone. There has been a massive increase, and we are seeing these problems all over the country.

As I have said, the tenants are too often being let down. Many of my constituents come to me with their problems, and many of my colleagues have raised in the House, and with the city directly, the issues that their constituents face with their properties. It is not unusual to find properties that are in complete disrepair and that we would not consider fit for human habitation in any way. It is not unusual for vulnerable women to be housed with dangerous men in these properties—for them to be at risk of attack or, in fact, to have been attacked.

I am becoming a broken record. I have brought a case to the Department of a 19-year-old rape victim who is waiting for trial and has been housed, without any regulation, with men who have been released from prison for the exact same crimes that she wishes to put people in prison for.

To respond to the point made by my hon. Friend the Member for Bristol East (Kerry McCarthy), two women in the last three years have been murdered in “exempt, supported” accommodation. In one case, the key worker did not notice that the woman had been murdered. After visiting the property, she said to the woman’s mother, “Oh, she’s absolutely fine”—but the person she had seen was the person who had murdered the woman. That is the level of support that vulnerable women are getting in this accommodation. It is dangerous, and it must stop.

My hon. Friend is absolutely right. She has raised those horror cases in her constituency at regular intervals, directly with the Department and in this House. Those cases of women left at real risk of harm, having truly suffered at the hands of dangerous men who they should have never been housed alongside, are not unique.

It is not unusual, when I have investigated cases in my constituency, to discover that the housing contract that was approved has forged signatures on it. There are multiple layers of subcontractors that get involved with the providers in this sector, and it is not unusual to see faked documents. I have had constituents come to me and say that they are being held to a contract that they have never seen before. It is also not unusual for people to be left without any hot water or electricity.

It is often the case that the tenants, who are desperately in need of care, support or supervision, are left to rot in disgusting properties and at real risk of physical danger. The residents who live alongside them are also being let down: over-concentration in particular areas just loads more need and deprivation into areas that are already struggling. Crime and antisocial behaviour has massively increased. I have had constituents break down, explaining that they are worried that their children are witnessing public drug taking, people collapsing in the street having drunk too much or urinating in their front gardens, all on what were once modest, quiet residential streets that were home to tight-knit communities. That is why so many people in my patch and my city are in utter despair.

I appreciate the point that my hon. Friend is trying to make. This weekend, a lady came to my constituency surgery to complain of exactly that issue: prisoners on release have been put next door to her and are making her life absolute hell, and she is not able to do anything. Not just that—the environment around the place is becoming filthy. It is creating a huge problem in the environment across the whole of the constituency, and our communities are breaking down because of the under-regulation that is taking place.

My hon. Friend is absolutely right. The example he describes is something I see too often in my own advice surgeries. People really are in despair. This situation is attacking the heart of the social spirit we need to help vulnerable people turn their lives around. People generally want to do the right thing by people who are in trouble. They want to have mixed communities where everybody can play a part in uplifting and supporting each other, but when there is an over-saturation of need, without the necessary supporting services, that breaks down the social fabric of our communities and the spirit of social solidarity.

So many times I meet people in complete despair at the change they have seen in their local areas as a result of the proliferation of exempt accommodation units. In many cases, they are desperate to move out and leave the places they have always loved, because they can tolerate the degradation of the living conditions of the whole community no longer.

This is all happening in plain sight. Only the Government have the power to act. I implore the Minister today to commit to taking the necessary action. No more pilots or evidence are needed. We have plenty of evidence; we have been shouting about the evidence for years. It is high time that we see some action.

As others have also said, I have been convinced for some time that some rogue operators in this sector have links to organised crime. I know that the police have raised concerns at a national level. The sector has the advantage of having zero chance of a jail term, so we can see why criminals, previously involved in drugs or whatever, are now concluding that this is a better business to get into. What do the Government need to do? They need to destroy the business model of the rogue operators. Good providers spend the additional money they receive in the ways in which it was always intended, so they will have no difficulty meeting higher legal tests or proving themselves, but that is not the case with rogue operators.

The Department for Work and Pensions needs to tighten up the welfare regulations. We need a proper legal test for access to enhanced housing benefit. The regulations have to be toughened up, and a proper test for what counts as care, support or supervision has to be set out in law. We have to cut off the ease with which this extra cash can be accessed.

From the Minister’s Department, we need tougher regulations and a regulator that has the full range of powers needed to deal with the problem. I want to see a tough “fit and proper persons” test that has to be passed before any provider is allowed anywhere near the sector, no matter how big or small the operator or how many units they have at their disposal. It need to be the law that they should all have to pass such a test.

Local authorities need the power to reject applications for exempt accommodation on grounds of saturation or over-supply in a specific area, and to insist on community impact assessments that have the power to prevent over-saturation. That is the only way we will be able to stop the overloading of high need into already difficult areas.

All tenants in exempt accommodation need to have some sort of local link to the area. Birmingham has become, in the words of some council officials I have spoken to, a dumping ground for people from elsewhere. A local link will not always be appropriate. I fully accept that in cases of domestic violence and occasionally in respect of ex-offenders, a local link needs to be broken to help somebody turn their life around, but we cannot simply allow a system where local authorities or national Government agencies are displacing huge amounts of vulnerability and need into other parts of the country, with no thought whatever for the people left to cope with the changes being made to their communities against their will.

Once a provider has shown that they are fit and proper, and we have prevented over-saturation, we need an inspections regime to keep providers on their toes and a regulator that has full powers of enforcement to clamp down on those who might still flout the system. We need a whole package of regulations to clamp down on the many abuses in the sector.

I know the Minister has been looking into the matter, and the Minister for Welfare Delivery has sent me written assurances that he is considering changes to benefits regulation. They must understand the desperation we are feeling as vast swathes of our communities are changing right before our very eyes, and we have no powers to do anything about it. I hope that in his response today he is able to give us some assurance that this Government will finally take decisive action to turn this absolute horror around.

It is a pleasure to serve under your chairmanship, Ms Fovargue. I thank the hon. Member for Birmingham, Ladywood (Shabana Mahmood) for securing this important debate. It is a topic that she and I, and a number of familiar faces across the Chamber today, have spoken about.

It goes without saying that problems with supported exempt accommodation are a serious matter that impacts not just the housing benefit bill but hundreds—possibly thousands—of vulnerable individuals across the country. Having previously worked as the deputy chief executive of YMCA Birmingham, I have seen at first hand the challenges that vulnerable people face and the real difference that good-quality support can make. I am grateful to the hon. Lady for mentioning the fact that there are good-quality providers who make a difference. I have a strong personal interest in improving the quality of exempt accommodation, and more importantly the life chances of those people living in it.

As a Government, we are determined to tackle the problems that have dogged the sector for too long, but we also want to do more to support the high-quality supported housing providers that deliver services to some of the most vulnerable people in society. We really need them to continue to operate successfully, so that people who need supported housing receive support and a roof over their head.

As the Minister responsible for homelessness and rough sleeping, I know the key role that good support and the right accommodation play in helping those who have fallen on hard times to get back on their feet and rebuild their lives. As the hon. Lady said, this kind of support is not always given. Right now, there are too many cases of rogue providers benefiting from taxpayers’ money without providing anywhere near the right kind of services for residents. The growth of exempt accommodation concentrated in specific areas of towns or cities is also creating neighbourhood issues, antisocial behaviour and criminal behaviour, as a number of hon. Members highlighted.

The Government are doing everything in their power to tackle rogue providers. Officials in the Department for Levelling Up, Housing and Communities have engaged with Birmingham City Council and local charities to build a better understanding of the issues, including the scale of the problem, the drivers of its growth, and its impact on residents and local communities.

Birmingham is obviously not the only city to experience such problems—the hon. Member for Bristol East (Kerry McCarthy) raised concerns about her area. At a national level, the Government have raised the bar on the standard of exempt accommodation across the board. In 2020, the Department published “Supported housing: national statement of expectations”, setting out the Government’s vision for better ways of working in supported housing and a much higher minimum standard of accommodation. The guidance was critical in showing what good looks like, and highlighted where providers and councils are working in joined-up and innovative ways to drive up quality. Ministers and officials have engaged with councils, housing providers, the regulator of social housing and other regulatory bodies to improve standards and our understanding of the issues.

That effort has been matched with proper Government funding. The hon. Member for Birmingham, Ladywood will, of course, be aware of the pilots. We have provided £5.4 million for a year-long pilot in five local authority areas in England. The pilots have been critical in helping us to understand the issues and the differences that we can make. The participants, including Birmingham, bring together teams from across different services, such as housing, revenue and benefits, environmental health, social care and, in some cases, the police and probation services, to address the different issues that residents face. Although I have not yet received the final report from the independent evaluation team, I know that the pilots are delivering real results and acting as models of good practice for councils to adopt.

Birmingham has developed a new charter of rights for residents of supported housing, along with a programme of support reviews and scrutiny of housing benefit claims. In Blackpool, the council has carried out a review of the support provided in accommodation for victims of domestic abuse to ensure that there is sufficient and tailored support.

The problems with exempt accommodation are spreading rapidly because all sorts of crooks are getting in on it. Neighbourhoods are being ruined. Quite frankly, they want action now. When will the Minister bring forward regulations to enable councils to do something about this?

I fully accept the right hon. Gentleman’s point, but part of the purpose of the pilots is to understand not just the scale of the problem, but, more importantly, what type of interventions work most effectively. It is all very well saying, “We know what the problem is. Therefore, we know how to address it.” I am not sure that is completely the case, given that different interventions have had different successes in different pilot areas. It is important, having spent £5.5 million, that we get the full value from the pilots and understand the best-quality interventions to make.

Would the Minister agree that one of the fastest ways to get action in this area is to destroy the business model of the rogue operators? That will not impact on good operators doing the right thing, because they are using the extra cash to do the right thing. It is the rogue operators that need the scrutiny and the blunt instrument of tougher regulations and a proper test in law.

I understand the hon. Lady’s frustration and the case she is making. Having worked for a good-quality provider, I understand the marginal prices that they work on. It is possible to put good-quality providers out of business through unintended consequences of applying tougher restrictions right across the sector. We need to be careful that we do not throw out the good with the bad when making the suggested changes.

I also used to run one of those accommodations, and we had an inspection regime before we were ever entitled to advance with the Department for Work and Pensions. That is not happening today. Every single year that we were given enhanced benefits at Women’s Aid in the Black Country, which serves the Minister’s constituents, there was an inspection. Cuts to councils have ended those inspections. I had to prove what we were doing. I had to show CCTV. That does not happen now. In Birmingham, £100 million a year is being given to rogue providers with no inspection, yet my individual constituents trying to get welfare and disability benefits from the DWP have a greater inspection regime than the people making £100 million.

I understand the hon. Lady’s experience, which we share, but to a degree she proves the point of the pilots; some councils have invested in staff to carry out inspections—as I mentioned when referring to Blackpool—and as a result of carrying out the inspections to which she refers, they have been able to cut their benefit bills. Councils are making the choice as to whether to invest in those staff. I remember such inspections myself. There must be an element of choice, because some councils are making choices.

Will the Minister give way?

Time is rapidly running out, but I will give way. Before I do, I just want to say that I completely understand the case that is being made by Opposition Members. I share their frustration and have a genuine, dedicated intention to tackle the issue. This will not be the last opportunity to discuss the matter. I look forward to discussing it outside of this Chamber.

I thank the Minister for giving way. Does he agree that councils across the country need regulations so that they can take action against rogue operators? My hon. Friend the Member for Birmingham, Edgbaston (Preet Kaur Gill) mentioned that she was successful in closing down a rogue operator in her constituency, but that it then opened up in a neighbouring constituency. Councils need the powers and regulations to shut them down permanently.

The best way to conclude would be to say that we certainly will not rule out the use of legislation if that proves to be the most important tool that we could deploy. Hopefully we will learn from the pilots when we have the final report, so that we understand which interventions work best and can develop future models that include them.

Question put and agreed to.