Tens of thousands face ‘devastation’ if government fails to tackle rogue housing providers, charity warns

Ministers urged to act to stop ‘eye-watering’ sums of public money going to unscrupulous providers

The government has been urged to take ‘decisive’ action following an investigation into exempt accommodation by The Independent and openDemocracy (Getty/iStock)

Tens of thousands of vulnerable people face “devastation” if the government fails to clamp down on rogue supported housing providers, ministers have been warned.

Ministers have been urged to take “decisive” action to prevent “eye-watering” amounts of public money from continuing to be paid to unscrupulous housing providers following an investigation by The Independent and openDemocracy.

Our probe revealed that more than £132m has been handed out in housing benefit to rogue providers for “exempt accommodation”, which is supposed to offer housing to vulnerable people such as women who have fled domestic abuse, homeless people and care leavers.

Under regulations, providers of exempt accommodation must be not-for-profit entities such as housing associations or registered charities providing “care, support or supervision”.

The investigation found bosses of some of these non-profit organisations have themselves been cashing in through a loophole – with large payments being made to private firms linked to their own directors or founders.

In March, housing minister Eddie Hughes set out plans to introduce minimum standards of support to be provided to residents, as well as changes to housing benefit regulations to “seek to define care, support and supervision”.

He said the package of measures included giving local authorities in England new powers to “better manage their local supported housing market and ensure that rogue landlords cannot exploit the system to the detriment of vulnerable residents and at the expense of taxpayers”. However, he said that “any measures requiring legislation” will be introduced “when parliamentary time allows”.

Matt Downie, chief executive at housing charity Crisis, warned that “acting slowly, or not acting at all” would mean the “devastation in human terms of tens of thousands of people living in squalor, intimidated by their landlords and their support workers [and] unable to move on with their lives”.

“We hear all the time about anti-social behaviour, the constant calling of the police and ambulances… neighbours desperately worried about women being abused in these places [and] organised crime being rife,” he added.

“The scale of this issue demands a joined-up and urgent response both in terms of legislation and funding from government that… recognises there is a scale of human misery and damage done to neighbourhoods and, frankly, to the ability of local authorities to deal with it, that… nobody can cope with at the moment. And it needs decisive and… generous action.”

He also called for a regulator to be given “clear and powerful levers” to make sure exempt accommodation was open to inspection and tenants were registered.

The number of households in exempt accommodation in Britain rose from 95,149 in May 2016 to 156,868 as of May 2021, according to figures uncovered by Crisis.

Labour MP Clive Betts warned that the taxpayer was being ‘ripped off’ by ‘unscrupulous’ people (PA)

Clive Betts, Labour MP and chair of the Levelling Up, Housing and Communities Committee, which is conducting an inquiry into exempt accommodation and is due to publish a report this year, called on ministers to “urgently” address the issue or see more vulnerable people put “at risk” and the taxpayer continue to be “ripped off”.

“It’s clearly a system that’s failing and it needs to change. The amounts of money going to these, shall we say, questionable providers of accommodation are eye-watering,” he said in light of the findings in The Independent and openDemocracy’s investigation.

“The taxpayer is being ripped off by unscrupulous people, and the system is allowing them to do this. The risk, if they don’t act, is this so-called system carries on, with people getting awful accommodation, often vulnerable people being put at risk, and public money being wasted.”

More than £132m in housing benefit has been paid to providers for exempt accommodation who have been subject to judgments or notices from the Regulator of Social Housing since 2018, the investigation revealed.

The figures, obtained under the Freedom of Information Act, cover 95 of more than 300 English local authorities, meaning the true figure is likely to be far higher.

A government spokesperson said: “It is appalling that rogue landlords are exploiting the supported housing system to profit from housing vulnerable people who need help to live independently.

“That’s why we recently announced our intention to bring forward new laws as soon as possible to crack down on rogue landlords, protect vulnerable residents and give councils stronger powers to intervene.”

This article was amended on 8 July 2022. It previously referred to Matt Downie calling for the Regulator of Social Housing to be given “clear and powerful levers”, however, his comment was a general one on the need for improved regulation and did not refer to a specific regulator.