Supported Housing (Regulatory Oversight) Bill

Ben Everitt Excerpts

2nd reading
Friday 18th November 2022 Commons Chamber

[Bob Blackman]

Clearly, one problem is that we do not know where all these properties are. We do not have the data right now. The hon. Lady will obviously know about Croydon, and we have concentrated on Birmingham. We know about Blackpool, Scarborough, Southwark, and certain other places in the country, but that just highlights that this issue is endemic across the country and why we need to take appropriate action.

Once a resident is working they may lose part of their housing benefit, and providers receive lower profits as a result, even though it is adequate to pay the rent. The conundrum therefore is that someone cannot afford a private rented property until they have a job, and they cannot get a job until they move into a property with affordable rent. That vicious cycle leaves nothing for those individuals to do during the day, and adds to increasing levels of antisocial behaviour resulting from inadequate exempt accommodation.

Exempt accommodation draws its name from its categorisation as exempt from locally set caps on housing benefit. That means that landlords can set sky-high rents, paid for out of taxpayers’ money, on the basis that they are offering adequate support. Where every room in a property is converted into a small bedroom, often properties would have with 60 or 70 bedrooms and a mere three bathrooms. Unscrupulous landlords have a licence to print money, making excessive profits by capitalising on loopholes in the market. In many cases, we were informed that there was more money in being a rogue provider than in illegal drug dealing. We are already seeing exempt accommodation abuse spreading across local authorities—I have mentioned Birmingham—and, without the Bill, it is only a matter of time before cases prevail in all areas of the country.

[Ben Everitt (Milton Keynes North) (Con)]

My hon. Friend may remember the evidence given to the Select Committee of a local authority in the south-east of England that had a case where a block allocated to exempt accommodation was sold and flipped overnight into an offshore property fund for hundreds of times the sale price. It is an absolute scam, and it is going international.

[Bob Blackman]

I thank my hon. Friend for that intervention. The example he cites is, of course, of millions of pounds. Not small amounts of money but millions of pounds are going offshore as a result of this issue.

Another common theme in the report was the neglect of interest in residents’ previous circumstances. We found, more often than not, that when domestic abuse survivors find their way into the hands of these rogue operators rather than specialist domestic abuse services, there is a real risk that they end up living in the same building as the perpetrator—literally the person who abused them in the first place. I am sure the whole House will agree that that is completely inappropriate and insensitive. Housing victims with potential abusers is hugely damaging and will have the reverse effect of the original intention of supported housing, which is, after all, to help people rebuild their lives.

If I may, I will share a short extract from the report on one tenant’s experience with a rogue provider. They say that their accommodation was

“managed by what could possibly be called gangsters, who would scare tenants at various times for various reasons, often for no reason. They were sometimes drunk and they were untrained for their roles. They were abusive, intimidating and preyed on the vulnerable…tenants were abused physically and mentally, but nothing was done.”

That quote is from someone who gave evidence to us and was a very brave individual to do so. The report goes on to cover the aforementioned issues in more detail and justifies the need for a Bill to regulate such scandalous plights.

I have already touched on the lack of data and documentation on providers, which is caused solely by the lack of regulation or previous acknowledgement of the issue. I therefore wish to explain how I found the relevant information needed to create a full picture in order to formulate the Bill. The journey began with multiple meetings with Crisis, which as we all know is a wonderful housing charity, to discuss its experience of working around exempt accommodation and those who have been subjected to harsh environments with inadequate support. It held a similar concern that it was a rapidly growing problem that until then was not receiving the political attention that it needed at national level.

The various Crisis skylights also enabled me to meet some brave and willing people with lived experience in such organisations. It was truly shocking to hear the impact that conditions had had on them and the further difficulties they had caused. That was disheartening, considering that those people had sought help and, in theory, the supported accommodation should have helped them back to normality rather than being a preventive barrier, as was the case. I am grateful to have met those people, who have been whistleblowers for the greater good. It takes a lot of courage to come forward, particularly when the providers know intimate details about them, which could easily be used against them by such manipulative bullies.

Understandably, many local authorities have taken a vested interest in the Bill throughout its journey. I have received many representations from local authorities up and down the country, which has enabled me to meet regularly with authorities from all over the country to discuss and address potential concerns arising from the sector and potential regulation. The consensus arising from those conversations was that the spiralling knock-on effects from merely one rogue provider in a district can be huge, whether from increased antisocial behaviour, prolonged claiming of housing benefit, or mental or physical health issues arising for residents.

I was saddened that, due to the dreaded conference cold, I was forced to miss the exempt accommodation conference held by Birmingham City Council in October. Colleagues have reliably informed me that it was an informative, eye-opening and productive series of discussions that has undoubtedly helped to align our goals and provide further weight to the case for a change in the law. Housing providers, and more widely housing representative boards, have engaged regularly on this issue through roundtables, private meetings and other such correspondence.

From the very beginning, I have been clear that one thing I did not want to bring about with the Bill was over-regulation or a negative impact on good providers. I have thus far concentrated on the dark side of exempt accommodation, but I am clear that we need to stress that that is not the only side. There are countless providers who do a really good job, offering high-calibre accommodation with attentive, benevolent care and providing vulnerable people with assistance. For some, they provide a helping hand to get residents back on their feet and live independently. For others with long-term needs, they provide a permanent supported home. They should also be able to carry on their good work with minimal implications from regulation and minimal additional costs. Having liaised with many representatives, interested parties and boards, we have collectively reached that intended objective.

There is also a third group: providers who entered the market without understanding what is expected of them, or providers whose services are not up to scratch but want to stay in the business and improve. We are committed to ensuring that they get the support they need to improve and develop their services.

Moving on to my parliamentary comrades, many Members, particularly those centred in the west midlands, have direct casework relating to the provision of exempt accommodation. Their views and perspectives have offered me an advantageous insight into the wider impact or consequences of supported housing from a greater perspective, and into what they believe are the most appropriate measures to combat such problems. I am humbled to see so many here today to support the Bill on Second Reading.

There is no doubt that we are all far too aware of the turbulent political climate in recent months leading up to this point. The Bill has outlived two Ministers and I am pleased to see two of them here today. Regrettably, my hon. Friend the Member for Walsall North is unable to be with us this morning, but I look forward to his support as we go forward. We are on the third Minister, who I welcome to her place on the Front Bench. I look forward to hearing her reply to the debate in due course. That has caused a number of setbacks as we have tried to ensure we have agreement with the Minister and officials, but, to a certain extent, it has been advantageous because have had three separate and hugely valuable contributions from Ministers.

--- Later in debate ---

[Shabana Mahmood]

The hon. Gentleman is right, and I was just about to make that point. A complaints procedure is necessary to protect, for example, the two constituents whose case I have already highlighted. They are effectively being punished for escalating a complaint to their elected Member of Parliament. We need a complaints system in-built into whatever regulation emerges after the licensing provided for by the Bill, so that there is recourse to help and so that providers getting into the sector understand that if they fail their tenants they can be complained about and they cannot hold them to ransom if a complaint comes in. A complaints mechanism would be an important element of keeping everybody in this sector honest, if I may put it that way.

The good providers will have no problem in proving that they are doing good work and will pass any test required of them with relative ease. I can pinpoint exactly who is doing a good job in Birmingham and who is not. Anyone who has done any work in this sector knows who the good guys are and knows where the problems are. I do not believe that any regulatory threshold applying to every provider would in the end amount to a barrier for the good providers. None of us would want to see them driven out of this sector, but I do not believe asking them to pass the same test as everyone else would achieve that.

[Ben Everitt]

Perhaps I am about to repeat the mistake made by my hon. Friend the Member for Bosworth (Dr Evans) and this may be a point that the hon. Lady is about to come to. Further to licensing, the inspections regime and the complaints regime, does she not agree that we need valid and robust enforcement practices, so that once these rogue landlords are identified through regulation, licensing and complaints, we can throw the book at them and then word will get round so that we drive them out of the sector?

[Shabana Mahmood]

The hon. Member makes an important point: we absolutely need enforcement. I might also observe that we need some money in order to pay for that enforcement—it does not happen automatically. There is no magic wand that can be waved to make sure that enforcement takes place: it requires staff, officers to go around and do the enforcement, and a proper system that is well regulated and sufficiently resourced—to put it bluntly, a system that has the money that it needs.

The hon. Gentleman is right that enforcement of these rules will be incredibly important. That is one of the reasons why, although I welcome a local licensing regime, I still want to see action from the Government. In the end, it is only a national regulator—or by passing a duty to one of the existing national regulators—that will be able to police the system consistently across the whole of the country. By regulating practice nationally, rather than leaving it to local licensing regimes, we will achieve the economies of scale that are required to make the system of enforcement affordable. Local authorities do have a crucial role to play, though, and I have seen the changes in Birmingham: the pilots that the Government commissioned have been undertaken and have reported, and have done good work. However, if we leave it to local licensing regimes, we will still allow rogue providers to play a whack-a-mole system. These are highly enterprising individuals who will, at lightning speed, work out where the gaps in the system lie. If they think Birmingham has got tougher, what is to stop them going straight across to Sandwell or Walsall, where the licensing might not be as strong because those areas have not previously had such a big problem? Suddenly, they have a big problem and have to bring in licensing, and those rogue providers just go to another part of the country. Local licensing is a good step forward, but the Government’s feet should be held to the fire. We need a national regulatory system that applies everywhere, so that this whack-a-mole system can be defeated once and for all.

[Shabana Mahmood]

The hon. Member is absolutely right: people who are in this sector for the right reasons, trying to do the right thing by vulnerable people, will welcome licensing and the new threshold. So many good providers in Birmingham have told me that they are tearing their hair out because the rogue providers are giving them a bad name too, and are driving them out of the sector because the rents go sky-high. If a provider is trying to do the right thing, the business model does not work for them; if they are in it just to cream off taxpayers’ money and line their own pockets, it is a great system, and they can do whatever they like. Strong regulation—national regulation—will be welcomed by all the sorts of people we want it to be welcomed by, which can only be a good thing for vulnerable tenants and citizens across the country.

[Ben Everitt]

The hon. Lady is being very generous in giving way. To her point about playing whack-a-mole, does she agree that the best way to end whack-a-mole is to grab one of the moles and give it a really good whack? If we catch one of these rogue providers and throw the book at them, word will get around, and we can chase those providers out of the sector.

[Shabana Mahmood]

Would that it were that easy. My experience of rogue landlords is that the worst really do act like a bunch of gangsters. Going after one will send a message to some of the others, but we need to close down all of the routes into the system. As I say, unfortunately, these are enterprising individuals; if they put their enterprising skills to good uses, we would probably welcome their contribution to our national life, but they are currently abusing the system, and abusing people while doing so. Until we close down all the avenues for abuse, we will still get rogue individuals thinking, “That’s a bit of easy money.”

In some parts of the country—I strongly suspect it has happened in a few cases in Birmingham—such lax regulation is providing ample opportunity for those involved in other criminal acts effectively to launder their money and pose as respectable citizens running housing associations. We know that that is part of what is happening in this sector across the country, so we need to push the Government—collectively, I hope; cross-party in this House—to bring forward national measures. That is why I will fight the cause for a national regulator come what may, because that is ultimately the proper answer to this problem.

As well as securing the quality of exempt accommodation nationally, the Government also have a responsibility to ensure that the taxpayer is getting value for money and that the money being spent in this sector is doing what we all believe it should be doing. In Birmingham, there are more than 21,000 providers of exempt accommodation accessing the higher rates of housing benefit that are available. This equates to millions of pounds of taxpayers’ money, but currently there is no way of knowing how much is being claimed by each provider, or whether providers are upholding their commitments and providing support to the tenants. The hon. Member for Harrow East made similar points.

The Government have been aware for at least a decade that robust information about exempt accommodation is not held centrally, but they still do not collect even basic data to understand the levels of housing benefit being spent within the exempt accommodation sector. When I asked the Department in December 2021 how much money is being spent on this sector, it simply responded that it was too costly to collect that information. I would say that it is too costly not to collect it given the abuse we have seen occur. As the Select Committee noted, the Government have been caught sleeping:

“The Government has no idea how much taxpayer money is spent on exempt accommodation, nor what this money is spent on.”

Again in my constituency, we have seen the emergence of what are called ghost tenancies, whereby a managing agent or a registered provider is claiming enhanced rates of housing benefit for an occupant who has already vacated a property, or who in some cases never lived in the property in the first place. We just have to clamp down on all this abuse, and good data collection by the Government can help us to do that.

One of the things missing from the Bill is a firm commitment on planning. I think there is a possibility for the Government to bring forward such measures, but I would have liked them to commit to planning measures in this Bill.