Non-commissioned Exempt Accommodation

Karen Buck Excerpts

Wednesday 23rd February 2022 Commons Chamber

[Lisa Nandy]

Let me just say that I really regret this partisan tone. The hon. Gentleman is absolutely right to say that I entered local politics in 2006 having worked not just with children in care and young homeless teenagers at Centrepoint, but with child refugees, campaigning against practices such as those at Yarl’s Wood immigration detention centre that had happened under a Conservative Government but were also happening under a Labour Government. I will fight injustice wherever I find it and whoever is responsible for it, and I will stand up for people who do not have a voice. That is the great gift and privilege of this place. We are handed a megaphone through which we can shout loudly and make things change for some of the most vulnerable people in this country, and that is what we should do. I gently remind him, too, that the record under this Government has been appalling. Social housing builds have fallen off a cliff and housing-related support has been stripped away. Talk to any of the organisations, including Centrepoint, which I was proud to work for, and they will tell you that that situation is causing enormous harm not just to the people affected, but to many of the people who live in those communities, and it has to change.

[Ms Karen Buck (Westminster North) (Lab)]

I do not mind being partisan on this issue. Although the Labour Government, between 1997 and 2010, should have built more social housing, the absolute brutal fact of the matter is that the number of social lettings available for tenants has fallen from just under 400,000 to 300,000 in the past decade, and that is on this Government’s watch and they must take responsibility for it.

[Lisa Nandy]

I defer to my hon. Friend on that. She has been a superb champion for housing reform in this country over many, many years, including under the last Labour Government, and particularly in the past decade when we have seen exactly what she describes unfold. She has done more to reform and tighten up the law in this area through the Homes (Fitness for Human Habitation) Act 2018 than the Government have done in the past 12 years, so, absolutely, I defer to her on that.

--- Later in debate ---

[Ms Karen Buck (Westminster North) (Lab)]

At any one time, there will always be tens of thousands—probably hundreds of thousands—of people throughout our society who need help and support, including housing support. They are the most vulnerable people any of us will deal with. They include people leaving prison, people leaving the National Asylum Support Service, people fleeing domestic violence, and people whose homelessness is made worse by factors such as substance dependence or mental health needs. Without the right housing support and the support that wraps around housing, the circumstances that leave them vulnerable will be made dramatically worse.

I do not believe that there was a golden age—there is a degree of consensus in that respect. However, I do not think it is possible to argue that there were not conditions in place years ago whose absence has led to the present situation, which in some parts of the country is nothing less than a crisis. Many people at a point of vulnerability could once have accessed social housing and/or intervention and support from local authorities, including through schemes such as Supporting People that simply no longer exist. As a consequence, many of those people are left adrift, as my right hon. Friend the Member for Knowsley (Sir George Howarth) said, at the bottom end of a private rented sector that is unregulated, as has been well documented, or in conditions that are now classified as being part of exempt accommodation.

If we get this right, and many providers do get it right, the experience of supported housing will transform people’s lives and give them an opportunity. Often, their needs are transitional and they are able to get back on their feet after fleeing domestic violence or coming out of prison. That is exactly what we want—again, there is cross-party agreement. I commend the many individuals, charities and other organisations working in the field; they are often underpaid, and they deserve all our thanks for working in extremely challenging circumstances.

If we get this wrong, we will find that we are wasting public money at scale—as I believe we are doing—and letting down extremely vulnerable people. I do not think it an exaggeration to say that in some cases we are casting them back into the kind of crisis of physical or mental health from which we are notionally trying to help them escape. As I am sure hon. Members who represent constituencies more directly affected than mine will say, the situation is also causing a crisis in neighbourhoods because of the over-concentration of some of the poorest types of accommodation. This has been happening at an escalating pace over the past five or six years. There are now 150,000 people in the sector: the numbers have gone up by well over half in the past few years.

I am well aware, and want to hear from colleagues, that exempt accommodation and its associated problems are overwhelmingly concentrated in areas such as the midlands and in cities such as Leeds and Sheffield. In a way it is no surprise, because the landlords and providers who see an opportunity to make money—this has been described as a gold rush—will exploit cheap accommodation, particularly houses in multiple occupation, that they can buy cheaply and rent out at the maximum level they can extort from the state, providing next to no services in exchange. They walk away rich, and their tenants and residents are left in terrible circumstances.

Central London has largely escaped the worst of that, simply because it is clearly less profitable for landlords to move into that market, and less easy to buy up and make a killing. However, it is striking that some of the largest apparent increases—here I must sound a note of caution about the data that we should all be able to share, data that I would love the Government to have more of and to be able to tell us more about—are now occurring in inner London, including my own borough.

We do not know for certain whether all the accommodation in this sector was classified on the same date—the information is not always comparable or reliable—but I can say that while there is a clear economic argument for exempt accommodation to be based in cheaper areas, some of this appears to be less about the economic drivers than about landlords and providers talking to each other, seeing opportunities in a particular area, and then piling in and exploiting those opportunities. Sometimes when the market becomes saturated, or a local authority such as Birmingham starts working effectively to clamp down in a particular area, they will up sticks and move somewhere else where they think they can make a killing. Some of that is likely to happen in London, but it could happen anywhere in the country. There is a danger that a bit of a whack-a-mole is going on, and that the whole process is too slow for anyone to keep track of what is going on in the real world, because it is likely that the crisis currently affecting cities such as Birmingham will be somewhere else in a few months’ time.

Why have we seen this situation emerge, and what do we need to do about it? The first point is that we know very little. We need more information from the pilots; we have had too little, too late. The truth is that a deregulatory approach in areas where we should not have deregulated has left the Government in the dark, and that needs to change.

Secondly, it is clear that the decade-long local authority funding crisis plays a major role. Supporting People was a valuable programme, and the ring fence was lifted during a time of reasonable economic success when local authorities were being properly supported for the work that they were doing. However, as a result of the removal of the ring fence combined with the crisis in local authority funding, we saw £1.6 billion disappear from the sector as local authorities had to deal with the crisis in statutory services, particularly care services, and a number of people with significant but less often statutory care needs were neglected as a consequence.

If local authorities cannot provide funding for support services, that will inevitably have an impact on the quality of care that residents receive. It means that the only funding available to cross-subsidise service costs comes from the profit that landlords make on rents. The end of the Supporting People programme and the quality assurance framework that accompanied it, subsequently compounded by reductions in social security after 2011, created the conditions that led to the emergence of some of the poorest-quality services and the consequent risk to residents. It is worth pointing out that Supporting People had a built-in regulatory framework because of the nature of the contracting system, and of course that went too. The decade-long downward pressure on other housing options, about which we have already heard, was another factor. The social housing grant was halved in 2010, and housing support for renters was also slashed, which left hundreds of thousands of people in housing need competing at the bottom of the private rented market.

Thirdly—and, in my view, most importantly—there are significant gaps in the relevant regulatory systems which the ruthless and the indifferent will always exploit to their own advantage. As Inside Housing makes clear in a characteristically excellent analysis,

“case law states that there only needs to be a ‘more than minimal’ level of care and support to qualify as ‘exempt’, meaning some providers can reap huge rental yields”

while providing almost no support.

So, we have a situation where exempt accommodation is not required to meet any specific property standards or standards of management and where many properties are exempt from the licensing requirements that otherwise apply to houses in multiple occupation.

The Minister was keen to stress the role that local authorities should have in inspection and regulation, but it is worth noting that environmental health services on the frontline of this kind of regulation have taken a major hit from 10 years of reduced spending in local government. Not all local authorities will apply the same degree of rigour and interest in this field, but there is no doubt that the lack of resources available for environmental health officers is a critical part of the problem. So, once again we find ourselves in a situation where those most in need receive some of the weakest protection, with consequences for them and, where concentrations of these properties build up, for their neighbours. Moving away from a regulatory framework that is enforced by the Government and by local government to a situation in which the subsidy applies to individual residents through the housing benefit system means that we are relying on those very vulnerable people to exercise some degree of control themselves and to try to enforce standards on their own. When they have so little bargaining power, that is not going to be realistic.

There is much that can be done to improve the situation, not least through the better management of housing stock through licensing, through the requirement for providers to meet a fit and proper person test, through better information sharing and through tougher penalties being used against landlords who breach the rules or who get around the rules by setting up a new company after having been found to be in breach. But changes to the regulatory framework have to backed by inspection and, where necessary, enforcement. It is simply no good, as we have seen so clearly in recent years, to set new rules and simply hope that everyone will behave themselves. Some of the providers operate with goodwill, but they will always be undercut by the rogues. The fact is that the issues in the exempt accommodation sector do not exist in a vacuum. If we undermine support and housing services generally, this is where we will inevitably end up. The Government need to bear down on what has been a regulatory failure, but also to look at the bigger picture; otherwise, they will be shutting more stable doors for many years to come.