Fraudsters could target ‘broken’ housing sector
LOOPHOLES in the ‘exempt’ supported housing system in Birmingham exposes vulnerable tenants to danger, according to a scathing new report.
Oversight and rules are so lax that fraudsters can potentially operate freely and funnel millions of pounds of public cash into private pockets.
The sector – called ‘dangerously unregulated’ by homeless charity Crisis – is worth £110 million in housing benefits cash in Birmingham alone, and an estimated £1 billion nationally.
It is supposed to ensure vulnerable people have somewhere safe to live where they can access support to for mental health issues and addictions.
But a ‘scandalous’ lack of regulations has instead made it an attractive money-spinner for people who do not always have the best interests of tenants – with some involved in potential fraud and other criminal activity.
That was the verdict of the boss of one housing provider who has just exited the sector.
In a 48-page report reflecting on lessons learned, the Board and executives behind Prospect Housing – now closed – say the exempt sector in Birmingham and nationally needs a radical and urgent overhaul.
“It is a broken system and not fit for purpose,” said Vicky McDermott, Prospect’s departing chief executive, about the report, called “Safe, Successful, Sustainable”
The findings echo what local politicians and charities have been saying for longer.
Some 20,000 people in Birmingham are housed in exempt properties, usually a type of house of multiple occupation with rooms for up to six people, but sometimes bigger hostels.
When poorly managed, anti-social behaviour, drug taking and violence spills out into communities. Police say it is a huge problem.
This week the Government pledged to work with Birmingham City Council to find a solution to the tackle rogue landlords.
Housing Minister Eddie Hughes, MP for Walsall North, said he would work with Sharon Thompson, the council’s cabinet minister responsible for housing.
But he also suggested the problem lay with a few bad landlords, not the housing system generally, saying: “Although I fully appreciate that the number of units of supported accommodation in Birmingham has doubled from approximately 11,000 to 22,000, it only takes a small percentage of rogue landlords to create a significant problem.”
The Government had already provided Birmingham with £2 million as part of a pilot project to improve exempt accommodation, he said.
The city’s biggest provider of exempt supported housing was this month deemed “non compliant” by the Regulator of Social Housing, a government agency.
The Regulator found that Reliance Social Housing CIC, designated as a “not for profit” housing provider, was funnelling much of the public money it received in enhanced housing benefits – running to millions of pounds a year – to private companies “and failed to ensure that any arrangements do not inappropriately advance the interests of third parties.”