Levelling Up Committee issues plea for urgent reform of exempt housing sector

The current system of exempt accommodation, a type of supported housing used to house a range of people with support needs, is a ‘complete mess’ and failing too many residents and local communities at the expense of the taxpayer, the Levelling Up, Housing and Communities Committee has said.

In a report the committee said that it was clear from its inquiry that some residents' experiences of exempt accommodation were 'beyond disgraceful', pointing to a breakdown of the system.

The report outlines exempt accommodation to be ‘a category of supported housing that is exempt from locally set caps on housing benefit’, which is used to house a range of people with support needs, such as homeless people, people who have experienced domestic abuse, prison leavers, and those recovering from alcohol and drug addiction.

As part of its research, the Committee received numerous testimonies from residents, which provided an insight into their experiences of the referral process, care, support and supervision, quality of housing and vulnerability to eviction.

The committee’s report calls on the Government to bring forward a series of urgent reforms for the sector to help boost the quality of exempt accommodation and support services.

It also calls for action to close the loopholes in the current system which “offers a licence to print money to those who wish to exploit it”.

The report recommends that the Government:

• Introduce compulsory national minimum standards for exempt accommodation, including on referrals, care & support, and quality of housing
• Give local councils the powers and resources to enforce these standards
• Require all exempt accommodation providers to be registered
• Create a National Oversight Committee to join-up existing regulators and mend the current ‘patchwork regulation’ "which has too many holes"
• Ensure the providers of exempt accommodation for survivors of domestic abuse have recognised expertise to provide specialist support and a safe environment
• Review the system of exempt housing benefit claims and clamp down on the exploitation of the lease-based exempt accommodation model for profit

Clive Betts MP, Chair of the Levelling Up, Housing and Communities Committee, said: “While there are many good providers of exempt accommodation, the findings of our inquiry on the state of exempt accommodation are shocking. The current system of exempt accommodation is a complete mess which lets down residents and local communities and which rips off the taxpayer. The Government must act now to help councils to tackle this situation and ensure people get the quality housing and support services they need to move on with their lives.

“The best examples of exempt accommodation highlight quality housing and specialist services, with proactive staff helping to support residents. However, in the worst cases support amounts to little more than a loaf of bread left on the table or a support worker shouting at the bottom of the stairs to check on residents."

Mr Betts added: “Residents and communities are being failed while unscrupulous providers make excessive profits by capitalising on loopholes in the system. Recently it has been reported in the media that these providers have included organised criminal gangs, who use the system to launder money. This gold-rush is all paid for by taxpayers through housing benefit. This must change and it is crucial the Government brings forward reform on a range of areas including on standards, regulation and oversight, and on funding to put this right. In our changes we are not asking for any additional expenditure; we are calling on the Government to get a grip on the vast sums it is paying out without effective oversight”.

The report acknowledges the potential impact on neighbours and local communities of high concentrations of exempt accommodation, which can attract anti-social behaviour, crime, rubbish, and vermin.

These impacts also risk undermining local support for supported housing, the report states.

The committee recommends the Government to take forward planning reforms, and close existing exemptions in legislation, to assist local councils in helping to manage supply in line with need and to balance with much needed family housing in local communities.

The report highlights the dearth of data on exempt accommodation which makes it difficult to determine how widespread the worst examples are and whether this taxpayer funded system is delivering value for money.

The committee has called on the Government to organise, within the next year, the collection, collation and publication of a range of key exempt accommodation annual statistics at a local authority level.

In a separate but related development to the committee’s inquiry, LUHC Committee Member Bob Blackman, Conservative Member for Harrow East, introduced a Private Members’ Bill in June to tighten up regulation and oversight of the exempt accommodation sector.

The proposed legislation, the Supported Housing (Regulatory Oversight) Bill is due to receive its Second Reading in the House of Commons on 18 November.

The LUHC committee intends to hold a one-off evidence session in the coming weeks to undertake pre-legislative scrutiny of the Bill and to hear the views of local authorities, exempt accommodation landlords and charity bodies on the proposed legislation.

The LUHC committee’s inquiry followed reports, including from the West Midlands, of unscrupulous landlords failing to provide the support and care that vulnerable tenants need, or to maintain the properties to a decent standard.

Lottie Winson