Supported Housing (Regulatory Oversight) Bill

Debate between Ben Everitt and Shabana Mahmood

2nd reading
Friday 18th November 2022 Commons Chamber

[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.