Supported Housing (Regulatory Oversight) Bill

Shabana Mahmood Excerpts

2nd reading
Friday 18th November 2022 Commons Chamber

[Shabana Mahmood (Birmingham, Ladywood) (Lab)]

I am delighted to speak in today’s debate, and I thank the hon. Member for Harrow East (Bob Blackman) for his decision to use his Private Member’s Bill slot to address some of the issues in the supported exempt accommodation sector. They are issues that are close to my heart, for they have affected my constituents very deeply. The proliferation of rogue providers and poorly managed supported exempt accommodation across Birmingham has scarred the communities that I represent.

Although the Bill does not do everything in quite the way I would wish, it is a huge leap forward. The hon. Member for Harrow East and I may agree on almost nothing else, but I am an enthusiastic supporter of his efforts in this regard, and I appreciate the generosity that he showed in his speech towards colleagues in Birmingham City Council, particularly Councillor Sharon Thompson, who has also been working incredibly hard in trying to get to the bottom of not just the issues in the sector, but the best ways of tackling them.

So I thank the hon. Gentleman, and I deeply appreciate his efforts and the Bill. I also recognise the work of the Levelling Up, Housing and Communities Committee, on which he sits. Without its in-depth reporting on exempt accommodation, we perhaps would not have made the progress we see today.

I resisted the temptation to intervene on the hon. Gentleman when he listed the previous Ministers with whom he worked. I welcome the new Minister to her place, and I recognise the efforts of her predecessors, particularly the hon. Member for Walsall North (Eddie Hughes) and the right hon. Member for Pendle (Andrew Stephenson). I worked very closely with the former, who worked in this sector before coming into politics. He was careful and assiduous in trying to increase the salience of this matter across Government, but I am afraid I cannot give them a free pass on the amount of time it has taken us to get to this point. We are here today only because we have used a private Member’s Bill slot to make this progress.

I feel so strongly about the Government’s delay on this matter, and I call them out for it, because every week and month that passes without action, without the regulatory oversight we need in this sector, rogue providers ruin communities all over our country. Whole streets have been utterly ghettoised by the proliferation of poorly run supported exempt accommodation. Vulnerable people are housed in these properties and, where they are unlucky and have a rogue provider, we effectively get state-sponsored grooming, state-sponsored abuse and all sorts of other horrors, some of which the hon. Member for Harrow East outlined and many of which I have seen in my constituency and across my city. It is high time that the Government called time on this behaviour, because taxpayers’ money is funding rogue individuals who are lining their own pockets—they are laughing at us while they do it, and it is completely unacceptable. They have ruined lives and communities, and they must face the consequences.

I welcome the progress we are making, but we could and should have got here faster. Even once the Bill passes, with Government support, there is still so much more work to do.

As the hon. Gentleman outlined, we all know that exempt accommodation is a type of supported housing that is exempt from the housing benefit regulations that limit rents to local levels, and we all know exempt accommodation is often used to house vulnerable people, including prison leavers, domestic abuse survivors, recovering addicts and those at risk of homelessness. We all recognise that the cost of helping such individuals is higher, so the exemptions that apply to this type of housing, and therefore the ability to access higher payments to house such people, were designed to allow providers to access adequate sums of money to help individuals as they seek to turn their lives around. Nobody envisaged that we would enter the world of abuse we have seen in the sector once the exemptions took effect. Obviously, this was not planned. Unfortunately, although the purpose of the exemptions is good, we have seen abuse proliferate.

The higher rate of housing benefit goes directly to the provider in return for their housing and supporting these vulnerable people, but we all know that, too often, it does not happen in practice. Like the hon. Gentleman, I recognise and appreciate the work of legitimate providers who act in good faith. They are in this work to do the right thing by deeply vulnerable people, and it is in all our interests that these vulnerable people—whether they have left the prison or care systems, whether they have fled domestic abuse and violence or whether they are trying to recover from addiction—have the help they need to turn their lives around, so that they can be productive and healthy citizens once again. Good providers, those that are not just looking for a job but have a social mission to help the most vulnerable in our society to turn their lives around, are doing important work, but there are now simply too many providers that, because they have seen the gaps, are willing to game the system and give the entire sector a bad name.

Vague housing benefit regulations—this relates to the point that my hon. Friend the Member for Croydon Central (Sarah Jones) made—and the sector’s exemption from council powers such as planning and the licensing of houses in multiple occupation mean that pretty much any provider can pop up anywhere and begin accessing housing benefit, with no test to ensure that they are decent or doing right by the vulnerable groups of people they are looking to house. Dodgy providers are cramming vulnerable tenants into badly run hostels and HMOs, and the system is a complete money-spinner for cowboy landlords who are lining their pockets with housing benefit payments while providing little to no support at all.

The system too often fails everyone. In the light of that, the Bill is not only necessary but long overdue. I have lost count of the number of times I have spoken to a constituent about a problem exempt property on their road or the disgusting treatment that an exempt tenant has received at the hands of their unscrupulous provider.

We are in this mess because of the gaps in regulations. The Housing Benefit Regulations 2006 state that a property cannot be exempt unless the claimant is being provided with “care, support or supervision”. However, those regulations do not define what “care, support or supervision” means, so local authorities are left relying on case law, which only says that the care, support or supervision has to be “more than minimal”. In practice, that means hardly anything at all. As the hon. Member for Harrow East said, it is not unusual for providers to suggest that care, support or supervision can be accounted for by somebody popping along to a property once a week, if tenants are very lucky, and shouting up the stairs, “Are you all okay?” and then walking straight back out again. If tenants are lucky, they might get a provider that thinks care, support or supervision responsibilities are discharged by putting CCTV cameras in communal areas. That is often the low threshold that rogue providers feel they have to overcome. It is obviously not what was envisaged when the regulations were drafted, and it is the reason I have engaged regularly with Ministers and officials in the Department for Work and Pensions.

While changes in regulation by the Housing Minister and her officials are necessary and important, we also need to destroy the business model and the gaps in housing benefit regulations that are the reason why this has proved to be such a lucrative money-spinner for the cowboys who have flooded into the sector. It is crucial that the Government tighten up welfare regulations and set out in law a proper test for what counts as care, support or supervision, because we must cut off the ease with which this extra cash can be accessed.

In Birmingham, we have had a worrying and significant growth in the exempt accommodation sector. As a result, we have a serious dependence on exempt providers to house many of the vulnerable people across our city. That is perfectly exemplified by the astronomical rise of a provider called Reliance, which is now the largest exempt accommodation provider operating in Birmingham. Just four years ago, Reliance was a dormant housing association based in Kent, and today it houses nearly 8,000 exempt tenants—approximately 38% of all exempt accommodation tenants in Birmingham.

I have come across a number of examples of bad practice by Reliance as a provider of this type of social housing that is failing my constituents and exacerbating the issues in the exempt accommodation sector. Right now, I am dealing with a case that involves two constituents who told me they were threatened with eviction, intimidated and left with less than an hour of one-to-one support during their tenancy at the hands of their provider, Reliance—all of this while being housed in a property that required a number of repairs. My constituents told me that for the six weeks that they were in one of these properties, they only had gas for two weeks.

After I referred the matter to Birmingham City Council, it made the decision in September to claw back some of the housing benefit that had been paid to Reliance in respect of these constituents in that property because it concluded that they were not being adequately supported. This action appears to have resulted in Reliance issuing all the tenants in the property with an eviction notice on the trumped-up charge that the residents were not engaging with the support it was providing, despite the council deeming that support to be inappropriate and of an unacceptable standard. To make matters worse, Reliance also asked the tenants to set up a direct debit to repay the “debt”, as it called it, for the housing benefit payments that it lost as a result of its poor support provision. Sadly, the saga does not end there.

Reliance has since tried to push for an informal agreement with Birmingham City Council, whereby Reliance would agree not to pursue the so-called debt against my constituents if my constituents and I withdrew our complaint. It is basically punishing my constituents for telling the truth, for calling out the absolute abject lack of support they have been receiving and for seeking help from their elected representative. This is a provider housing thousands of vulnerable people across my city. It seems to me that it basically thinks it is too big to fail, that it has Birmingham City Council over a barrel, and that it can essentially hold us all to ransom and therefore get away with this utterly outrageous behaviour. I appreciate that may seem an extreme example, but it demonstrates perfectly the need to take power away from providers such as Reliance and put it back in the hands of local authorities, which at least have responsibilities to citizens first and foremost.

The licensing scheme in the Bill provides a framework for councils to determine who can provide exempt accommodation within their areas, and that is an important step forward. A licensing scheme would drive up standards and ensure that both the accommodation and support are good enough to enable people with incredibly complex and changing levels of need to move on with their lives. To achieve that, the scheme must provide new powers to councils to ban or fine dodgy providers so that they can finally clamp down on those who flout the system. It must also include what effectively amounts to a fit and proper persons test. It should not be possible to provide housing to some of the most vulnerable people in our country and not even have to establish that someone is of good character before they do so.

I also stress that a licensing scheme must include an inspections regime, which will ensure that even after a licence has been secured we can keep providers on their toes to prevent a situation whereby rogue providers think that they just have to cross the threshold of getting a licence and they can then go back to their previous practices. They must be made to continue to demonstrate good practice to keep their licence. For that, regular inspections to keep providers on their toes and to ensure a decent level of service is maintained must be brought forward.

[Dr Luke Evans (Bosworth) (Con)]

The hon. Lady is right to want to ensure that standards and an inspection regime are in place. Does she feel that there should be a complaints procedure as well, which could be raised with the bodies, so that if someone is running into trouble, they have that back-up?

[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.

[Chris Clarkson (Heywood and Middleton) (Con)]

The hon. Lady is making an important point about consistency between different local authorities. Arguably, some of that could happen through sharing best practice, as we saw for example when Blackburn piloted the scheme: it worked with other local authorities. However, does she agree that the good providers will welcome local licensing, because it will give them an opportunity to demonstrate that what they are providing is a quality service?

[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.

[Bob Blackman]

indicated assent.

[Shabana Mahmood]

The hon. Member is nodding, and I suspect he would have liked that to make its way into the Bill in a stronger form than it currently has. I welcome the direction of travel of the commitment that has been given, but it would have been a much stronger Bill had those measures been a requirement on the Government. Oversaturation in certain areas is a huge problem, particularly in Birmingham, and it can only be dealt with if there is a planning requirement to get planning permission. That would enable local authorities to prevent oversaturation in their areas. There are streets in my constituency where a quarter of all the houses are now exempt accommodation. If we had proper planning powers and the ability to deny planning permission to people who want to turn these properties into exempt accommodation, a council would be able to prevent that from happening, and therefore prevent the saturation and the ghettoisation I have spoken of.

I really welcome this Bill. I do not believe that the Government have discharged their responsibilities to my constituents or people across the country sufficiently at the speed that is required—because, as I say, every moment of delay scars another community across our country for a long time—but I do welcome that they have at least supported this Bill. This Bill will pass, and I hope we can very quickly fill the gaps in regulation that exist so that all the vulnerable tenants across our country can get the support they need to turn their lives around, and no longer are communities scarred and damaged for a long time to come.

[Several hon. Members rose—]