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Under-regulated supported housing failed vulnerable tenants – a complete overhaul of the sector is needed

3 min read

“Too big to fail.” An expression that conjures up images of overleveraged investment banks and cavalier financiers, isn’t a phrase you would normally associate with a sector housing vulnerable people. Yet that’s exactly what’s being said about the providers of supported exempt accommodation.

This sector is estimated to cost nearly £1 billion to the taxpayer in the last year alone and housing over 106,000 people across the country. 

It’s the best kept secret in the housing world, so much so that even some politicians, let alone the general public, are unaware of its existence. This week its failings have been laid bare by a landmark report from Prospect Housing, a provider in Birmingham that ceased operations this summer after being deemed non-compliant by the Regulator of Social Housing, now determined to see lessons learned from its closure. 

A byzantine network of registered providers, managing agents, and landlords props up the supported exempt sector. It was brought into existence to acknowledge the higher costs associated with supervised accommodation and units must meet the provision of “care, support and supervision”. The properties are free from rent restrictions and spared strict adherence to local planning and licensing rules – the “exempt” part. 

It’s a lucrative business proposition for the rogue landlords cramming unsafe properties with tenants. Each successful placement comes with enhanced housing benefit payments, supposedly to provide the additional care and supervision vulnerable tenants need – of which there is no statutory definition – but more often than not ending up in the pockets of cowboy operators obscured by “not-for-profit” status. 

Tenants who had conquered a drug addiction were placed in homes rife with substance abuse

Prospect’s report is damning, and its intervention is the first of its kind. A provider owning up to the extensive malpractice in all areas of the sector. From support and quality of care to funding and governance, the team headed up by interim CEO Vicky McDermott has left no stone unturned. 

What they found should be a wake-up call to the new Housing Secretary. Tenants who had conquered a drug addiction placed in homes rife with substance abuse, providers classifying a small percentage of their portfolio as social housing and reaping enhanced housing benefit for the rest, and properties let at exempt rents that are owned by directors, their family, or at worst, those involved in organised crime. 

My own inbox is filled with horror stories from those who live in exempt properties. Forged rental agreements, accommodation unfit for human habitation, assault and antisocial behaviour are all regular features. There are some good providers and those for whom exempt properties have provided a lifeline, borne out by the section of the report focussed on tenants’ stories, but they are few and far between. 

There is a way out of this crisis that doesn’t involve turning out 106,000 people onto the street. A whole sector approach that links together DLUHC with the DWP, talking to local authorities about fraudulent activity and working with the police to break the link with organised crime, will begin to clean up the sector.

Reform of housing benefit regulations alongside a change in the definition of “support” written into the law will improve the quality of provision. We need a beefed-up regulator enforcing these new standards, including a fit-and-proper-persons test, to drive out the cowboys taking advantage of vulnerable people and end the reign of the profiteers. A full investigation into the sector is also long overdue.

I’ll keep working with colleagues who want to see these changes so that we can do right by our constituents, and finally give tenants and residents the secure homes and safe communities they deserve. 


Shabana Mahmood is the Labour MP for Birmingham Ladywood. 

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